South East Asia most valuable unicorn is going public. Grab has confirmed plans to list in the US through a merger with a special purpose acquisition company. As part of the SPAC listing process, the company is to merge with Altimeter Growth Corp, resulting in a combined company worth $39.6 billion upon listing.
Papers filed for the company’s proposed listing indicate Grab CEO, Anthony Tan, will have 60.4% of the voting power with just 2.2% stake in the company. Softbank Uber and Did Chuxing are other players that will be involved in decision-making.
Tight control is essential if Tan is to have any chance of making crucial decisions in navigating the company’s markets. However, this is the first time that a company has gone the SPAC route and accorded the CEO 60% voting rights. Bypassing the IPO listing route, Grab has attracted less scrutiny, allowing the CEO to command such massive controlling power.
Grab is going public, having lost money every year since coming into being in 2012. As of last year, the company had accumulated close to $10 billion in losses, with last year’s net loss topping $2.7 billion on net revenues of $1.6 billion. The company is expected to break even after 2023.
Grab intends to raise money from the offering to build the lowest cost and most efficient delivery network. It also plans to revolutionize the global mobile payment ecosystem as well as financial services and digital banking.
Listing in the US will not thwart, Grabs plans to focus on the Southeast Asian market. The region presents a tremendous opportunity for growth given a population of over 600 million people and low adoption of online services.
However, there are suggestions that Grab could be forced to expand to other markets. Plans are underway to scale up existing core businesses with an increased focus on food delivery and digital finance.
In its filing, Grab also indicated it faces several risks, key among them being regulatory scrutiny. The company is currently under investigation over potential violations of anti-corruption laws related to its operations in one country.