Grab, the dominant ride-hailing and food delivery firm in South East Asia is preparing to list shares within the US during a deal that values the firm at nearly $40bn (£29bn).
Shares will trade following a merger with US-listed Altimeter Growth Corp.
Grab expects to spice up quite $4bn via the transaction, which is predicted to be completed by July.
The listing would mark the most important US share offering so far by a southeast Asian company.
Altimeter Capital chief Brad Gerstner said his company was drawn to Grab due partially to its leading position during a part of the planet where technology-fuelled economic changes are still in their “early days”.
“We’ve already seen this movie – how profit and growth have unfolded within the US, China, Europe, and Latin America and we’re now seeing that and better in South East Asian markets.” he said during a presentation for investors, during which he compared Grab to “Uber, Doordash plus Ant Financial beat one app”.
Launched in 2012 as a ride-hailing app like Uber, Grab has since expanded broadly.
Active in eight countries and roughly 400 cities, it now handles food and grocery deliveries, courier services, digital payments, and more for an active customer base of quite 25 million people as of December.
It was already considered South East Asia’s most precious start-up, with a net worth estimated at roughly $15bn during a private fundraising round in 2019.
The firm’s adjusted net revenue for 2020 was $1.6bn, but the corporate has yet to form a profit. Ìt is also facing increased competition within the main market of Indonesia from rivals Gojek and Sea, which started trading within the US in 2017.
Grab said the merger with Altimeter, which can bring $4bn from Altimeter and other heavyweight investors like Blackrock, T Rowe Price, Fidelity, and others would allow it to create its growth.
“Despite Covid-19, we’ve begun 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.”
Altimeter Growth Corp was acknowledged last year by Silicon Valley-based venture capital company Altimeter Capital Management, a firm that has backed firms like Uber, Zillow, and more.
Altimeter Growth could also be a “special purpose acquisition vehicle” or Spac, established to find a private firm to merge with then take public on the stock market.
Such firms, also called “blank cheque companies”, have seen a surge of recognition in recent years, and are seen as a faster route to taking an organization public with less scrutiny.
Following the merger, Grab and Altimeter will form a replacement company, expected to be valued at $39.6bn.
That will benefit existing investors, which include Japan’s Softbank and China’s Didi Chuxing. Uber also took an outsized stake within the company after selling its Southeast Asian business to Grab in 2018.