Grab to list in New York via $40 bil. merger with Altimeter Growth
SINGAPORE, NNA - After months of speculation, Grab Holdings Inc. (Grab), which operates Southeast Asia’s leading superapp, has decided to go public in New York through a blank check merger with Altimeter Growth Corp. (AGC).
The partnership with public-listed shell company AGC is expected to see the largest-ever U.S. equity offering by a Southeast Asian company, according to their press release on Tuesday.
When the proposed deal is sealed in the coming months, it will give Grab an initial pro-forma equity value of approximately $39.6 billion. It will also deliver about $4.5 billion in cash proceeds to the Singapore-based company.
Proceeds include more than $4.0 billion of fully committed private investment in public equity (PIPE) which has snowballed due to significant investor interest led by $750 million from funds managed by Altimeter Capital Management, LP.
Other investors include funds and accounts managed or advised by BlackRock, Counterpoint Global (Morgan Stanley Investment Management) and T.Rowe Price Associates, Inc., as well as Fidelity International, Fidelity Management and Research LLC, Janus Henderson Investors, Mubadala, Nuveen, Permodalan Nasional Berhad and Temasek Holdings.
Leading family groups from Indonesia including Djarum, the Sariaatmadja family and Sinar Mas also participated in the PIPE.
Altimeter has committed up to $500 million to a contingent investment equivalent to the aggregate dollar amount of redemptions from Altimeter Growth’s shareholders.
Following the merger of Grab and the special purpose acquisition company, they will become wholly-owned subsidiaries of a new holding company.
The combined company expects its securities to be traded on Nasdaq under the symbol “GRAB” in the coming months, said the press release.
Grab has been catering to everyday needs and everyday entrepreneurs, offering services across mobility, deliveries, financial services and more, in an all-in-one app in Southeast Asia. It is the category leader for online food delivery, ride-hailing and digital wallet payments in the region.
Anthony Tan, group CEO and co-founder of Grab said, “It gives us immense pride to represent Southeast Asia in the global public markets. 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,” he added.
Brad Gerstner, founder and CEO of Altimeter, said, “As one of the world’s largest and fastest-growing internet companies, Grab is paving the digital path forward for the 670 million citizens of Southeast Asia. We are thrilled that Grab selected Altimeter Capital Markets as their partner to go public and even more excited to become sizable long term owners in this innovative, mission driven company.”
Altimeter has also committed to a three-year lock-up period for its sponsor promote shares, 10 percent of which will go to the recently announced GrabForGood Fund to support programs with long-term social and environmental impact.
Responding, Tan added, “Altimeter is investing in a way that demonstrates our aligned values, with a three-year lock-up on their sponsor promote shares and unprecedented contribution of shares to our new GrabForGood endowment fund. They're joining our journey for the long-run, together with an incredible day one cap table of renowned institutional investors and sovereign wealth funds."
Grab’s ambition to be a public company was driven by strong financial performance in 2020, despite the COVID-19 menace.
Founded in 2012 in Singapore, Grab posted gross merchandise value (GMV) 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, accounting for about 72 percent of total regional GMV for ride-hailing, 50 percent of total regional GMV for online food delivery and 23 percent of regional TPV (total payment value) for digital wallet payments in 2020.
Southeast Asia is one of the fastest growing digital economies in the world, with a population about twice the size of that of the United States. The region presents huge opportunities as online penetration for food delivery, on-demand mobility and electronic transactions are still a fraction of enormous markets in the U.S. and China.
Across online food delivery, ride-hailing and digital wallet payments, Grab expects its total available market to grow from approximately $52 billion in 2020 to more than $180 billion by 2025.
Grab's ecosystem of complementary services, which address high-frequency, everyday needs, creates a flywheel effect designed to drive growth while lowering cost of service, said the press release.
"The more services offered, the more the choices, and consequently, the greater the value to consumers using the Grab superapp. In fact, the proportion of Grab users that use two or more services has grown five times over the last two years.
"As consumer spend grows, so do the income opportunities for Grab’s merchant and driver-partners, encouraging more of them into Grab’s ecosystem. This leads to wider selection, better value, and faster delivery times for users, with benefits to consumer loyalty and lifetime value," said the press statement.
Altimeter Capital Management, LP is a leading technology-focused investment firm with over $15 billion in assets under management. Managing a variety of venture and public funds, it aims to serve as an expert long-term partner to innovative companies as they enter the public markets.