The most dominant ride hailing and food delivery company of South East Asia, Grab, is getting ready to get publicly listed in the United States in a deal which set the value of the company at almost $40bn.
The company expects that the listing will allow it to raise as much as $4bn and it is expected that the listing process will be completed by July this year. If the day goes through, it will be the largest share offering ever in the US by a company from South East Asia.
Grab has been able to draw the attention of Altimeter Capital partly because of the dominant position of the company in a part of the world where economic changes caused by technology is still in the early days thereby leaving scope for growth, said the company’s chief Brad Gerstner.
“We’ve already seen this movie – how profit and growth has unfolded in the US, China, Europe and Latin America and we’re now seeing that and better in South East Asian markets.” he said in a presentation for investors, in which he compared Grab to “Uber, Doordash plus Ant Financial all in a single app”.
“They really are at the forefront of the digital transformation in the region.”
Since being launched in 2012 initially as a ride hailing app like Uber, the company has expanded significantly. The company currently is engaged in delivering of food and grocery and courier while also being active in the area of digital payments and more in eight countries and about 400 cities with a claimed active customer base of more than 25 million users as of December.
The company has already been identified as the most valuable start-up of South East Asia and has a net worth of about $15bn when it last conducted a private fundraising round in 2019.
The adjusted net revenue of the company was at $1.6bn ion 2020. However it is yet to churn out a profit. Additionally, the company is also facing competition in its major market of Indonesia from companies such as Gojek and Sea, which started trading in the US in 2017.
Grab will be able to build on its growth because of its merger with Altimeter which will give the company an additional investment of $4bn from Altimeter as well as other heavyweight investors such as Blackrock, T Rowe Price, Fidelity and others, the company has said.
“Despite Covid-19, we’ve come out of 2020 stronger than ever, demonstrating the resiliency of our business,” said Grab co-founder Anthony Tan. “Going public now will give us wind in our sails to accelerate our mission.”
Silicon Valley-based venture capital company Altimeter Capital Management had set up Altimeter Growth Corp last year and it has the support from firms such as Uber, Zillow and others. Altimeter Growth is a “special purpose acquisition vehicle” or Spac which was set up with the aim of finding a private firm which will merge with it and then will be taken public on the stock market.
(Adapted from BBC.com)