Grab app celebrates historic listing, but stock price drops

Grab Holdings, a Singapore-based tech company that provides a super-app offering rideshare, delivery and financial services, began trading on the Nasdaq on Thursday following a merger with an acquisition company special purpose (SPAC).

A super app is a mobile app that offers various seemingly unrelated services through a single mobile interface.

Grab’s founders rang the opening bell to commemorate the largest ever U.S. listing of a Southeast Asian company. The stock price opened at $ 13.06 on Thursday and had fallen below $ 9 by midday.

Grab has merged with Altimeter Growth in a transaction that involves an enterprise value of $ 39.55 billion (£ 29.7 billion). The deal raised $ 4.5 billion in cash for Grab.

Spotlight on Southeast Asia

The opening ceremony in Singapore was another milestone as it was the first time the Nasdaq sounded from Southeast Asia, said Bob McCooey, global head of capital markets at the Nasdaq and president of the Asia-Pacific region.

“Today we are shining the spotlight on Southeast Asia and how its local technology companies are providing new opportunities to the region’s 660 million people,” said Anthony Tan, CEO and co-founder of Grab.

In addition to Singapore, Grab also serves customers in Thailand, Vietnam, Cambodia, Myanmar, Malaysia, Indonesia, and the Philippines, covering 465 cities in total. As of December 2020, Grab had 25 million monthly transaction users and 5 million registered drivers.

Enter finances

In 2021, Grab’s first three quarters ending September 30 showed record gross value of goods (GMV), totaling $ 11.5 billion. In 2020, GMV, or total volume sold, was $ 12.5 billion with adjusted net sales of $ 1.6 billion.

The company has yet to make a profit.

Grab started operating in 2012 as a ridesharing app. Since then, its offering has expanded to include food, grocery and parcel delivery. It also added financial services such as mobile payments, a GrabPay Mastercard, loans for drivers, working capital loans and bill financing for merchants, as well as insurance for drivers and consumers. .

Harvard Connection

Tan and Tan Hooi Ling, the co-founders of Grab, first met at Harvard Business School.

“We have been greatly inspired by the many examples of companies with double bottom line – those that are dedicated to both generating profit and having a social impact,” the co-founders said during a presentation.

They decided to start with the VTC because they felt that the taxi system already in place was not safe.

“Back then, you wouldn’t have felt good if your family members took cabs on their own in many towns in the region. Just going somewhere could be a security risk, ”they said.

Entrepreneurs also believed they could provide a financial lifeline for drivers who did not have adequate access to economic opportunities.

“The connection between the needs of the passengers and the driver gave birth to the idea for the company that became Grab in 2012,” they said.

Digitization of Southeast Asia

“Grab’s powerful flywheel combining transport, delivery and payments has demonstrated sustainable growth even during the pandemic and is playing a fundamental role in the digitization of Southeast Asia,” said the founder and Altimeter CEO Brad Gerstner in a press release.

The merger with Grab was approved by Altimeter shareholders on November 30.

The proceeds of the transaction include a fully committed $ 4 billion PIPE, or private investment in public stocks, with $ 750 million from funds managed by Altimeter Capital Management. Other investors include funds and accounts managed or advised by BlackRock, Counterpoint Global and T. Rowe Price Associates.

Read more: Grab delays PSPC’s $ 40 billion merger

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