Grab Reportedly Reviewing IPO on the US Stock Exchange This Year
On-demand service provider, Grab, is reportedly exploring an initial public offering, aka IPO, on the United States (US) stock exchange this year. The Gojek competitor is said to want to raise US$ 2 billion or around IDR 28 trillion.
A Reuters source said if that happened, it would be the Southeast Asian company’s biggest IPO. “The market is good and the business is doing better than before,” he was quoted as saying by Reuters, Monday (18/1). Currently, the Singaporean decacorn is trying to finalize planning for an IPO. Grab will also consider market conditions.
Last week, Grab’s financial subsidiary, Grab Financial Group, received series A funding of US$ 300 million or around IDR 4.2 trillion. This investment is led by Hanwha Asset Management South Korea, and involves K3 Ventures, GGV Capital, Arbor Ventures, and Flourish Ventures.
The Income of the Grab Subsidiary Has Grown in the Pandemic Era
The company claims the subsidiary’s revenue grew 40 percent on an annual basis (year on year/yoy) last year. This is because Southeast Asian people are turning to digital transactions during the corona pandemic. The number of monthly users of investment products, AutoInvest, for example, nearly doubled in December 2020.
Insurance product offerings also grew, with monthly active users quadrupling to more than 4.5 million in three months. Meanwhile, the company as a whole claims that revenue has recovered 100% just like it was before the coronavirus pandemic. This is supported by a decacorn strategy that focuses on targeting Micro, Small and Medium Enterprises (MSMEs).
President of Grab Ming Maa said business performance continued to improve despite the Covid-19 pandemic. “Grab’s total net income will increase by around 70% on an annual basis (year on year/yoy) in 2020,” said Maa, quoted from Tech In Asia, earlier this month (4/1).
Grab is also aggressively targeting the informal economy segments, such as shops, shops, women and farmers. This strategy will continue in 2021. “To create a beneficial ripple effect, not only businesses are entering the platform, but the entire value chain that supports them (MSMEs),” said Maa.
The news came when the investor, SoftBank, applied for a permit to establish a special-purpose acquisition company or SPAC at the end of last year (21/12/2020). This investor plans to raise around US$ 525 million for investment in technology companies.
SPAC will Bridge Grab for IPO
“The SPAC will bridge SoftBank’s private and public investment strategies. This allows us to partner with technology companies ready to offer IPOs or IPOs that are growing rapidly,” the company said in the filing document quoted from CNBC International, last month (22/12/2020).
SPAC is called a blank check company because it doesn’t have any operations. This type of company is actually an investment vehicle designed specifically to raise funds for the rich. The funds are used to finance acquisition or merger opportunities within a specified period.
However, the target companies that are merged or acquired are not usually identified. SPAC attracted high-profile investors, including hedge fund manager Bill Ackman, during the year. The deals totaled more than US$ 60 billion this year, according to Renaissance Capital data.
Momentum Works data shows that the gross transaction value or GMV of GrabFood is US$ 5.9 billion or around IDR 83 trillion in 2020. Meanwhile, Gojek’s GoFood is only US$ 2 billion or IDR 28 trillion. Grab also contributed nearly half of the total GMV of food delivery in Southeast Asia over the past year, despite the coronavirus pandemic.
In total, Indonesia’s contribution is the largest in the region, namely US$ 3.7 billion. Grab also contributed nearly half of the total GMV food delivery in Southeast Asia over the past year, despite the coronavirus pandemic. In total, Indonesia’s contribution is the largest in the region, namely US$ 3.7 billion.