How Grab CEO's Harvard connection opened the door to world's biggest Spac deal

Grab CEO and co-founder Anthony Tan has always stressed the importance of business partnerships.
Grab CEO and co-founder Anthony Tan has always stressed the importance of business partnerships.PHOTO: GRAB

SINGAPORE (BLOOMBERG) - A few years after launching Grab Holdings in 2012, Mr Anthony Tan got a piece of advice from Mr Jack Ma. The co-founder of Alibaba Group Holding told the entrepreneur that life is a tsunami. When you are up on the wave, get ready for the crash, he said.

In 2020, that all came to pass. The coronavirus sent cities across South-east Asia into lockdown. Demand for ride-hailing, a key business, plunged. Then around December, its big plan to merge with arch rival Gojek collapsed.

Mr Tan was not ready to give up on going public. Early this year, a connection introduced him to Silicon Valley investor Brad Gerstner, the founder of Altimeter Capital Management. The two men, though from opposite sides of the world, had a lot in common. Both were Harvard Business School alumni, and both had eschewed easier paths in life to set up their own firms.

Within about three months, the pair had announced the world's biggest special purpose acquisition company (Spac) deal, which will see Grab list in the United States at a valuation of almost US$40 billion (S$53.4 billion).

"A year ago, the world looked like it was going to end," Mr Tan, 39, said. "As an entrepreneur, you go through these crazy lows and crazy highs."

In an interview over Zoom, Mr Tan recalls that after the initial introduction was made, Mr Gerstner called some common friends to check him out. They included Mr Rich Barton, the entrepreneur who leads Zillow Group, and Uber Technologies chief executive officer Dara Khosrowshahi, a Grab board member. Mr Tan passed the test.

The Grab-Altimeter Spac merger underscores the importance that is placed on connections at the top of the technology world, and how graduating from universities like Harvard still helps to open doors.

Mr Gerstner has also invested in Coupang, the South Korean e-commerce giant founded by Mr Bom Kim, who attended Harvard Business School at around the same time as Mr Tan before Mr Kim dropped out. Grab rival Gojek was founded by Mr Nadiem Makarim, a Harvard Business School classmate of Mr Tan who is now Indonesia's education minister.


After the initial introduction was made, Mr Gerstner (pictured) called some common friends to check Mr Tan out. PHOTO: BLOOMBERG

So many billions were "created out of that class", Mr Gerstner, 49, said.

Their three companies already have a combined valuation of about US$130 billion, including almost US$80 billion for Coupang after its initial public offering (IPO) in March.

"The world is shrinking," Mr Gerstner said. "Some of the most exciting leadership today is in regions like South-east Asia."

Mr Tan, born into a wealthy business family in Malaysia, got the inspiration to start Grab during his time at Harvard Business School from 2009 to 2011. He quit the family business, Tan Chong Motor Holdings, and started a taxi-hailing service known as MyTeksi with Harvard classmate Tan Hooi Ling.

Grab would later expand into businesses, including food delivery and online payments, as it became a so-called "superapp" in South-east Asia.

Mr Gerstner was in Harvard about a decade earlier, from 1999 to 2000. The American investor grew up in a small town in Indiana, admiring American investor Warren Buffett. He started his career as a securities lawyer handling IPOs. After getting his Master of Business Administration from Harvard, he joined venture capital firm General Catalyst and later founded and sold three companies.

In the depths of the global financial crisis in 2008, he set out on his own, establishing Altimeter Capital with just US$3 million raised from friends and family. Today, the firm, which invests in public and private technology companies, manages US$15 billion. He is backed tech players, including Expedia Group, Uber and software firm Snowflake Inc.


Mr Tan said his relationship with Mr Son (pictured) is still close. PHOTO: BLOOMBERG

Mr Tan, a fixture at the World Economic Forum, has always stressed the importance of business partnerships. He spends much of his time networking, according to people who know him. On the eve of the merger announcement, Mr Tan said he was out having dinner with a merchant partner.

When in Indonesia, Mr Tan abandons his signature black T-shirt and puts on a traditional batik shirt. He addresses conference guests in Bahasa Indonesia. When visiting Tokyo to attend a SoftBank Group conference in 2019, he bowed deeply after SoftBank founder Masayoshi Son, his most early ardent supporter, introduced him as "a new superstar in the AI era".

SoftBank invested about US$3 billion in Grab, but relations with Mr Son cooled after the Japanese company put pressure on Grab to combine with Gojek, according to people familiar with the matter.

Mr Tan said his relationship with Mr Son is still close. During the Zoom interview, he took out his phone and read aloud a text message that he said he received from Mr Son about the merger. "Anthony, thank you so much for the update. I'm really happy to hear that the IPO is going well," the message read.

Mr Gerstner, meanwhile, says he is impressed by how Grab persevered through the pandemic - and by its decision, like his own, to plough its own furrow.

Grab "ultimately chose an independent path", he said. "It's simply one of the biggest Internet companies doing one of the biggest IPOs of the year."