The Southeast Asian “super app” has been grabbing headlines in recent months over its plans to go public in a record-breaking deal. Grab Holdings offers everything from food delivery to ride-hailing, and banking services.
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The company announced in April that it will merge with the U.S.-based SPAC — Altimeter Growth Corporation (NASDAQ: AGCUU). The merger is valued at a whopping $39.6 billion. This article outlines some of the specific details about when Grab is going public.
When can I buy Grab stock?
There is not yet a definitive date for the finalization of this deal. However, the current timeline is for Grab stock to be tradable by the end of July on the NASDAQ under the ‘GRAB’ ticker. It also is considering having a secondary listing in its home country of Singapore.
Grab is a company that is growing at a rapid rate but is not yet profitable. The net loss for 2020 was $2.7 billion. However, it plans to generate a profit in 2023 and has outlined its path to achieving this goal.
Total revenue in 2020 was $12.5 billion. This revenue was well-diversified between its different business segments and geographically. The ride-hailing business has maintained profitability since Q4 2019. However, expansion into financial services and deliveries are the main reason for the lack of an overall profit.
Grab forecasts that the deliveries segment will be EBITDA profitable in the latter half of this year. It will take more time for the financial services to be profitable. However, once this division becomes established, it will have significantly higher margins than the other segments.
Grab’s growth potential
Through this merger, Grab will have $4.5 billion in funds to help generate further growth. The company has already shown its ability to successfully expand into new regions and industries. While the company started out life in 2012 as a taxi service and ride-hailing app, it has since branched out into delivery services and financial services. This includes providing loans, bank accounts, and mobile payments to users.
All of these different offerings are powered through a single “super app”. There is a huge amount of scope still for the likes of online food delivery and ride-hailing in Southeast Asia. The region is catching up on the hot trends seen in China and the U.S. in recent years.
Grab is accessible in eight countries to date, covering about 400 cities. Its monthly active user base is about 25 million people. Five million drivers are registered for delivery and ride-hailing, while two million businesses and merchants use the app for selling products or accessing financial services.
Many people in Southeast Asia still don’t either have a bank account or sufficient access to important financial services. Grab is hoping to bring these people into the banking space.
It has a lofty goal of providing standard banking services to the 670 million residents of Southeast Asia.
Nearly half of these people are younger than 30 years old. This is a demographic that is likely to engage with a shift to digital banking, especially as smartphone usage becomes more prevalent in the region. Grab believes that across each of its business divisions, the total addressable market could increase from $52 billion last year up to more than $180 billion by 2025.
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