Grab is Reportedly Injected by South Korean Investors
Singapore-based Decacorn, Grab, is reported to have secured funding from a South Korean-based venture capital company, Signet Partners. This investment was obtained when Gojek’s competitor was said to be planning to offer an IPO.
The amount of funds is not stated. However, the funding from Signet Partners is aimed at expanding investment reach to Southeast Asia. Signet Partners is a subsidiary of the retail company Shinsegae Group, which was founded in July 2020.
This venture capital invests in fashion corporations from the United States (US) Entireworld and South Korea’s Ably Corporation, as well as Homes. “Signet Partners will continue to invest in promising startups, both at home and abroad,” said an unnamed Signet Partners official quoted by Tech In Asia, Thursday (18/2).
In addition to Signet, Grab received investment from a venture capital company from South Korea, Stic Investment last year. The value is US$ 200 million or around IDR 2.9 trillion. Now, Grab is again getting funding from South Korean investors.
This was also obtained when the Decacorn was reportedly going to IPO on the stock exchange of the United States (US) in the second half of this year. The jumbo startup has also appointed Morgan Stanley and JPMorgan Chase and Co. “They were chosen by Grab to assist in completing the IPO process,” said a source with knowledge of the problem quoted from Bloomberg, last month (25/1).
Businesses Experiencing Growth despite the Pandemic
Grab is said to be targeting US$ 2 billion or IDR 28.2 trillion through an IPO. A Bloomberg source said the details of the offer may change as the considerations are reviewed. The Decacorn also boosted business performance amid the planned initial public offering.
“Grab’s total net income has increased by around 70% on an annual basis (year on year / yoy) last year,” said Grab President Ming Maa, quoted from Tech In Asia, last January (4/1). The company also claims the revenue of its subsidiary in the financial sector, namely Grab Financial Group (GFG), grew 40% yoy last year.
GFG also won series A funding of US$ 300 million or around IDR 4.2 trillion. The investment was led by South Korea’s Hanwha Asset Management. Other investors involved in the funding round are K3 Ventures, GGV Capital, Arbor Ventures, and Flourish Ventures.
“The company raised a special fund for GFG because, despite strong business growth, the reality is that millions of people and small businesses still lack affordable and transparent access to financial services,” said Senior Managing Director of GFG Reuben Lai quoted in a press release last month (14 / 1).
Meanwhile, as a whole, Grab claims that its income has recovered 100% as before the coronavirus pandemic. It’s supported by a decacorn strategy that focuses on targeting MSMEs.
Grab Collects Loans of IDR 28 Trillion
Previously, this Southeast Asian decacorn startup managed to collect term loans worth US$ 2 billion or the equivalent of IDR 28 trillion (assuming IDR 14,000 / US$) from a number of creditors. Grab claims that this to be the largest institutional lending in Asia’s technology sector.
Initially, Grab targeted a five-year loan worth US$ 750 million, but due to commitments from international institutional investors the loan amount was enlarged. It will be used to support the company’s expansion in the Southeast Asia region.
Anthony Tan, the CEO and co-founder of Grab Holding, said that it shows investors’ recognition of the value of the Grab super app platform and simultaneously “The company continues to make consistent progress in achieving the growth and sustainability milestones,” he said as quoted by Reuters, Monday (1 / 2/2021).
It bears interest of 450 basis points (bps) above the LIBOR (London Interbank Offer Rate). As of 29 January 2021, the 12-month LIBOR rate reaches 0.31%. This means that Grab loan interest reaches 4.81% per year.