Southeast Asian ride-hailing and food-delivery giant Grab Holdings has announced its intention to go public in the US as it merges with US-based Altimeter Growth Corp, a special-purpose investment vehicle sponsored by Altimeter Capital.
Under the proposed transactions, announced Tuesday (April 13), Grab and Altimeter Growth will become wholly owned subsidiaries of a new holding company that is expected to have an equity value of approximately US$39.6 billion—which would make it the largest-ever US equity offering by a Southeast Asian company.
The proposed deal will provide Grab with approximately US$4.5 billion in cash proceeds. Buoyed by this cash injection, Grab expects to grow its market share across online food delivery, ride-hailing and digital-wallet payments more than threefold over the next four years—from approximately US$52 billion in 2020 to more than US$180 billion by 2025.
Grab co-founder and group CEO Anthony Tan said becoming a US-listed public company will represent "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," he said. "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," he added.
The agreement includes a US$4 billion private investment in public equity (PIPE) from a group of Asian and global investors, including BlackRock, Counterpoint Global, T.Rowe Price Associates, Fidelity International, Janus Henderson and Temasek, among others.
The combined company expects its securities will be traded on Nasdaq under the symbol “GRAB” in the coming months.
Altimeter founder and CEO Brad Gerstner called Grab "one of the world’s largest and fastest-growing internet companies".
Grab already claims to be a category leader across its core verticals. In 2020 it accounted for approximately 72% of total regional GMV for ride-hailing in Southeast Asia, 50% of total regional GMV for online food delivery and 23% of regional TPV for digital wallet payments, according to Euromonitor data.
As it seeks to grow its market share further and bolster its superapp proposition, what does this mean for marketers in the region?
Greg Paull, the principal of marketing consultancy R3, told Campaign Asia-Pacific that Grab is uniquely placed to become this region’s Uber, Airbnb and TripAdvisor "all rolled into one".
"A more vertically integrated app will give potential advertisers a unique community with unprecedented levels of data," he said.
Meanwhile, R3 co-founder and principal Shufen Goh believes that Grab represents a powerful alternative for advertisers looking to reduce reliance on the walled gardens of Amazon, Apple, Google and Facebook.
"Marketers are looking for options beyond the walled gardens of the big four that can help them leverage data throughout the customer journey from discovery to experience to loyalty," she said.
"Grab has potential to be the app in Southeast Asia that powers more intelligent and relevant targeting based on consumer behaviours and transactions—being useful rather than annoying to consumers."
Similarly, Xiaofeng Wang, a senior analyst at Forrester, said Grab's IPO will enable the company to invest more heavily in its advertising offering and data capabilities.
"One of the key values that a superapp can provide to marketers is a deep understanding of their customers through access to rich consumer data—including profile, behavior, transaction etc.," Wang said. "Grab's IPO will make it more capable of harnessing such data and helping marketers in Southeast Asia to better understand and engage with their customers."
Ambrish Chaudhry, managing strategy director for Asia at brand agency Superunion, said he expects the vote of confidence in Grab's superapp ambitions to inspire more businesses to widen their purview.
"Grab's IPO is a real fillip for the Southeast Asian digital ecosystem and a vote of confidence for their audacious super-app strategy," he said.
"The Southeast Asian customer has shown that they are open to engage with brands they trust across multiple categories, and more and more businesses will realise they have the opportunity to play a bigger role in the customer's life."
"Expect a lot more startups to widen their vision to a more expansive ecosystem. We're already seeing travel businesses focus on domestic experiences and food reservation apps go into delivery and couponing. Branding and marketing will increasingly move to a race for share-of-life," Chaudhry predicted.