The most valuable start-up of Southeast Asia, Grab, which offers services from food delivery and ride hailing to online banking, is reportedly planning to go public in the U.S. in a record deal with a special-purpose acquisition company (SPAC), securing nearly $40 billion (£29bn) in valuation.
Singapore-based Grab, which plans to list on Nasdaq in the US, has hit a $39.6 billion merger deal with United States-based Altimeter Growth Corp. It is undoubtedly the biggest deal till date involving a SPAC, also called as a blank cheque shell firm, which is known to raise money first, while seeking businesses to purchase later. This has in fact become the newest trend in global finance over the past year.
As part of the deal, ride-hailing and food-delivery giant, whose valuations almost doubled over the last 18 months, will receive nearly $4.5 billion in cash. This would also include worth $4 billion in a private investment through a public equity, which is a funding mechanism typical of SPACs, in the biggest-ever sale of share by a South-east Asian giant in the US.
The company has been a clear pandemic winner because drivers were able to deal with the loss of consumers throughout the lockdown period as people placed various orders for services to be delivered to their households. In 2020, Grab, which functions in eight countries, recorded around $12.5 billion in gross revenue.
The other backers of Grab include Chinese ride hailing giant Didi Chuxing, Uber Technologies and Japan’s SoftBank. Meanwhile, the merger as well as flotation has attracted various investors which includes Singapore-based Temasek, Mubadala of Abu Dhabi, Morgan Stanley and BlackRock.
While, a record $99 billion has already been raised by around 306 SPACs this year, with the involvement of Martin Luther King Jr’s son, Joanna Coles, a former editor of Cosmopolitan and Shaquille O’Neal in launches. An overall, $83 billion were raised by 248 SPACs, last year.