The Spac boom may be deflating after more than a year of frenzy, but it is still creating vast riches for the right deals.
Take Grab Holdings, South-east Asia's ride-hailing and delivery giant, which is merging with the special purpose acquisition company (Spac) Altimeter Growth Corp and plans to go public in the United States by July.
The transaction will give the Singapore-based company a market value of US$39.6 billion (S$52.6 billion) up from a valuation of US$16 billion earlier this year.
For co-founder and chief executive officer Anthony Tan, who will hold 2.2 per cent of Grab after the deal, that means his fortune will surge to US$829 million, based on the stock he will own. The shares that co-founder Tan Hooi Ling and president Ming Maa will hold will be worth US$256 million and US$144 million, respectively, according to the Bloomberg Billionaires Index.
Shares of the Spac are trading about US$3 above the deal price, meaning that the CEO could soon become a billionaire. A Grab representative declined to comment.
"The market's positive reaction to the Grab merger signals strong investor enthusiasm for transportation technology and the future of mobility," said Mr Asad Hussain, senior analyst for mobility technology at research and data provider PitchBook. "We expect continued growth."
The two co-founders met at Harvard Business School while working on their MBAs between 2009 and 2011. They came up with an idea for delivering safe taxi services in their home country of Malaysia, and Mr Tan gave up his family's business, one of the nation's biggest auto distributors, to focus on the plan.
In 2012, the two started a cab-hailing app known as MyTeksi, which later relocated to Singapore after raising money for a regional expansion. The start-up, rebranded as Grab in 2016, now encompasses food delivery, online payments and financial services.
The company generated US$1.6 billion in adjusted net revenue last year, according to a filing last week. It is forecasting earnings before interest, taxes, depreciation and amortisation will turn positive in 2023 with adjusted net sales growth of 42 per cent for the next three years.
Like some other start-ups about to go public, Grab has created an endowment fund for partners and South-east Asian communities. In its first effort, GrabForGood will provide support for Covid-19 vaccinations. The initial funding is estimated at US$275 million in cash and shares, with the company's two co-founders and Mr Maa pledging a combined US$25 million of their stock.
"I don't track how much I have because it doesn't matter," Mr Tan said in an interview.
"We're blessed to be able to take Grab public, and we've set up the GrabForGood endowment fund to ensure that our commitment and resources to serve the community will continue to grow even as the company grows."
While Grab's listing is boosting some individual fortunes, the biggest beneficiary is Japanese conglomerate SoftBank Group, which injected about US$3 billion into the firm through a series of investments starting in 2014. After the deal, its Vision Fund will own an almost 19 per cent stake worth about US$7 billion. Uber Technologies and Didi Chuxing Technology will have holdings of US$5.4 billion and US$2.8 billion, respectively. Some family offices have also bought in, including Man Capital of Egyptian billionaire Mohamed Mansour.
Asian firms linked to the tech industry have been doing well in their US debuts. South Korean e-commerce giant Coupang, also backed by SoftBank, surged 41 per cent when it started trading in New York last month after pricing its initial public offering above a marketed range and increasing the size of its share sale. That made Coupang founder Bom Kim one of the world's richest people.
While the enthusiasm for Spacs has been receding amid a crackdown by the US Securities and Exchange Commission, PitchBook's Mr Hussain is optimistic.
"Investors look at the reaction to the Grab Spac and see that as a positive sign that US equity markets are in a very suitable environment to be in right now," he said. "The success of the Grab Spac will pave the way for more South-east Asian start-ups in particular to consider listing through Spacs."