Grab is Officially Going Public in the US in $39.6 Billion SPAC Merger Deal
Superapp Grab is finally pushing ahead and going public in the what is being touted as the largest-ever US equity offering by a Southeast Asian company.
The Singapore-based company that started out as a ride-hailing app and quickly grew to offer deliveries, financial and other services, will list on the Nasdaq market in New York under ticker symbol “GRAB.” It will do this through what’s known as a special purpose acquisition companies (SPAC) merger with Altimeter Growth Corp. in a deal valued at $39.6 billion. Altimeter Capital Management, LP is a technology-focused investment firm with over $15 billion in assets under management.
SPACs are shell companies formed essentially to raise capital through an initial public offering to acquire a private company. Also called “blank-check” companies, SPACs circumvent the usual process of a traditional IPO.
In a new release emailed to Esquire Philippines, Grab said it will receive $4.5 billion in cash through the deal, as well as a private investment in public equity or PIPE worth $4 billion. PIPEs allow companies to raise capital from specific investors instead of on the public stock exchanges.
Reports of Grab finally going public have been making the rounds of financial new platforms for months. According to the company, its decision to become a public company was driven by strong financial performance in 2020, despite COVID-19. The company said it posted GMV (gross merchandise value) of approximately $12.5 billion in 2020, surpassing pre-pandemic levels and more than doubling from 2018. The company is also currently the category leader in Southeast Asia for its core verticals, including ride-hailing (72 percent of total regional GMV), online food delivery (50 percent of total regional GMV), and digital wallet payments (23% of regional TPV or total payment volume) in 2020.
Grab said it expects its total addressable market to grow from approximately $52 billion in 2020 to more than $180 billion by 2025.
“It gives us immense pride to represent Southeast Asia in the global public markets,” Grab Group CEO and co-founder Anthony Tan said. “This is a milestone in our journey to open up access for everyone to benefit from the digital economy. This is even more critical as our region recovers from COVID-19. It was very challenging for us too, but it taught us immensely about the resiliency of our business. Our diversified superapp strategy helped our driver-partners pivot to deliveries and enabled us to deliver growth while improving profitability. As we become a publicly traded company, we’ll work even harder to create economic empowerment for our communities, because when Southeast Asia succeeds, Grab succeeds.”