Grab's bumper US listing: What you need to know about South-east Asia's biggest start-up

Grab is South-east Asia's largest start-up and was valued at just over US$16 billion (S$21.4 billion) last year.
Grab is South-east Asia's largest start-up and was valued at just over US$16 billion (S$21.4 billion) last year.PHOTO: REUTERS

SINGAPORE (REUTERS) - Grab, South-east Asia's biggest ride-hailing and food delivery firm, is going public in the United States via a merger with special purpose acquisition company (Spac) Altimeter Growth, securing a valuation of nearly US$39.6 billion (S$52.9 billion).

The deal is set to be the world's biggest ever by a blank-cheque company.

Here's what you need to know about Grab:

What is Grab?

Founded in 2012, Grab is South-east Asia's largest start-up and was valued at just over US$16 billion last year. It launched as a Malaysia ride-hailing service and has since expanded into food, grocery and parcel delivery to digital payments, lending and other financial services, calling itself a "superapp".

Headquartered in Singapore, it operates across eight markets in the region, counting Indonesia as its biggest one. Grab's venture with Singtel won a digital bank licence in Singapore last year.

Grab was thrust into the global spotlight in 2018 when Uber sold its South-east Asian business to it and in return took a stake in the company.

Grab has about 7,000 employees and has technology centres in Singapore, Beijing, Seattle, Bangalore, Ho Chi Minh City and Cluj-Napoca in Romania.

Who are Grab's financial backers?

Grab has raised about US$12 billion so far from the likes of Japan's Softbank Group and MUFG and China's Didi Chuxing.

Its investors range from venture and hedge funds to automobile companies and other ride-hailing firms, and include Uber Technologies, Booking Holdings, China Investment Corporation, Coatue Management, GGV Capital, Hillhouse Capital, Hyundai Motor Company, Invesco, Microsoft, Ping An Capital, Toyota Motor, Tiger Global, Vertex Ventures Holdings and Yamaha Motor.

As part of the listing, new investors will include Singapore investment company Temasek, BlackRock, Fidelity International, Abu Dhabi's Mubadala and Malaysia's Permodalan Nasional Bhd

Who does it compete with?

Indonesian ride-hailing and payments firm Gojek is Grab's biggest competitor. Gojek and the country's leading e-commerce business Tokopedia are close to a merger ahead of a planned listing.

Singapore-based Sea, which has e-commerce, gaming and digital payments businesses, is also muscling into food delivery and financial services in Indonesia. Sea has won a digital bank licence in Singapore.

Grab is also likely to increasingly start competing with banks as it expands its financial services.

It also competes with food delivery companies such as FoodPanda and Deliveroo.

What are its financials?

Grab's net revenue surged 70 per cent last year and it saw its delivery business emerge as its biggest segment as more consumers shifted to online food delivery during the pandemic. Its ride-hailing business is breaking even in all its operating markets, including Indonesia.

Grab reported adjusted net revenue of US$1.6 billion in 2020 and expects this to rise to US$4.5 billion in 2023. It expects to turn positive on an Ebitda (earnings before interest, taxes, depreciation and amortisation) basis in 2023.

In February, it raised US$2 billion from a term loan, and holds about US$5 billion in cash reserves.

Who are its key executives?

Mr Anthony Tan, 39, is the company's chief executive officer and co-founder.

Ms Tan Hooi Ling, the other co-founder, overseas Grab's operations, including corporate strategy and technology.

Both Tans, who are unrelated, met at Harvard Business School where they conceived the idea of the ride-hailing company.

Grab president Ming Maa, a prominent dealmaker from SoftBank, joined the company in 2016.