Grab's Nasdaq debut to set tone for Southeast Asian tech listings

SINGAPORE -- Grab, Southeast Asia's biggest ride-hailing and delivery firm, makes its market debut on Thursday after a record $40-billion merger with a special purpose acquisition company (SPAC), in a listing that will set the tone for other regional offerings.

The backdoor listing on Nasdaq marks the high point for the nine-year-old Singapore company that began as a ride-hailing app and now operates across 465 cities in 8 countries, offering food deliveries, payments, insurance and investment products.

Grab's rivals, including regional internet firm Sea and Indonesia's GoTo Group, are also bulking up, with the region's internet economy forecast to double to $360 billion in gross merchandise volume by 2025.

Grab was founded by Anthony Tan, its chief executive, and Tan Hooi Ling, who developed the firm from an idea for a Harvard Business School venture competition in 2011.

CEO Tan, 39, expanded Grab into a regional operation with a range of services, after launching as a taxi app in Malaysia in 2012. It later moved its headquarters to Singapore.

"What we have shown to the world is that homegrown tech companies can develop great technology that can compete globally, even when international players are in town ... we can compete and win," Tan told Reuters.

He said Grab's listing would help showcase the opportunity available to investors in Southeast Asia, a region with a population of about 650 million.

Grab's listing brings a payday bonanza to early backers such as SoftBank Group Corp. and Chinese ride-hailing giant Didi Chuxing, which invested as early as 2014.

They were later joined by others, such as Toyota Motor, Microsoft and Japanese bank MUFG. Uber became a Grab shareholder in 2018 after selling its Southeast Asian business to Grab following a five-year battle.

Analysts see scope for many players in Southeast Asia's fragmented food delivery and financial services markets, but the road to profitability can be a long one.

In September, Grab cut its full-year adjusted net sales forecasts, citing renewed uncertainty over pandemic curbs on movement.

Third-quarter revenue fell 9 percent and its adjusted loss before interest, taxes, depreciation, and amortization (EBITDA) widened 66 percent to $212 million. Grab said GMV jumped 32 percent in the quarter to a record $4 billion.

It aims to turn profitable on an EBITDA basis in 2023.

Grab said it completed its business combination with the SPAC, Altimeter Growth Corp. Grab will begin trading on Nasdaq under the ticker symbol "GRAB."

Grab raised $4.5 billion alongside the SPAC transaction, including $750 million from Silicon Valley tech investor Altimeter Capital Management in a deal in April.

-reuters-

Can taxi booking firms ensure safety for Southeast Asian women?

SINGAPORE/HANOI - A co-founder of GrabTaxi, Uber's biggest competitor in Southeast Asia, remarked earlier this year that safety is so central to the online taxi booking business that some of his drivers feel like they are tracked at every moment - even when they go to the bathroom.

The Malaysian company and Brazil-based rival Easy Taxi made headlines over the past year by attracting over $400 million in investment. But a rape accusation against an Uber driver in New Delhi has thrown taxi apps under a different spotlight.

Uber has since been banned in the Indian capital, adding to bans or legal action in several countries including Spain, Thailand and the United States. Authorities' common complaint is that Uber's service includes private vehicle owners, which contrasts with GrabTaxi and Easy Taxi.

Both use licenced taxi drivers, which helps their strategy to market themselves as safe for women in cities such as Jakarta. The transportation system in the Indonesian capital is among the region's most dangerous for women, according to a survey by the Thomson Reuters Foundation.

With safety at the center of their marketing strategy, the rape allegation against the Uber driver in India could threaten the image of these firms, whose investors include Japan's SoftBank Corp and other international names.

"Women are our target audience," said Nguyen Tuan Anh, general manager at GrabTaxi in Vietnam. The majority of the company's passengers are women - as much as 70 percent in the Philippines.

GrabTaxi said it only works with drivers of taxi firms that check identity documents, driving licences and criminal records. It asks drivers to resubmit those documents upon signing up, and confirms that applicants are still contracted to taxi firms.

"Its drivers are all from known taxi brands so I don't have to worry about safety," said banker Bui Thi Thu Trang. The 30-year-old said she uses GrabTaxi frequently in Hanoi and has enjoyed numerous discounts and offers, which include vouchers for make-up from Shiseido Co Ltd 4911.T.

Representatives from Uber in Vietnam did not respond to repeated requests for comment for this article. An Uber spokesman in Singapore did not provide comment.

PHOTOGRAPHS

GrabTaxi and Easy Taxi typically provide driver details such as photograph and phone number. GrabTaxi also allows passengers to "share" their trips online so family and friends can track their location. On both apps, pick-up points are chosen by the user.

"If it is late at night, without apps like this you've got to go on the street," said Joon Chan, regional managing director for Easy Taxi, southeast Asia. Easy Taxi's driver screening includes testing patience and cordiality, Chan said.

Park Byung Joon, head of the urban transport management programme at Singapore's SIM University, said taxi booking firms need to improve processes to ensure the drivers they screen are the individuals driving their cars.

"I use taxis a lot in Singapore as well, but I hardly ever check" whether the driver matches the photo, he said. "When you finally check it ... you are already sitting in the taxi."

GrabTaxi, co-founded by Anthony Tan in 2012, reported a six-fold jump in users over the past year to about 500,000. It estimated 3 bookings are made through its app every second across Southeast Asia.

"Passengers in Thailand, Philippines, Malaysia - the big problem is safety," Tan said in an interview with Reuters in May discussing GrabTaxi's ride-tracking function.

Tan said one driver talked to him about safety features such as drivers' photos and details. "'My face is there in the cloud, tracking me all the way,'" Tan quoted the driver as telling him. "'The cloud knows I'm going to the toilet, it's staring at me.'"

source: www.abs-cbnnews.com