The Singaporean car-sharing and meal-delivery company makes a historic Wall Street debut with its super-app Grab. At the time of its IPO, the Kuala Lumpur-based giant was valued at over $40 billion. An unprecedented feat, which enabled it to outstrip all its competitors on the market.
The Grab story
Grab was created by two Malaysian students from Harvard Business School. They were Anthony Tan, its future founder, and his fellow student Hooi Ling Tan. It was at this prestigious American university that the idea of creating an application for booking cabs was born . The project was fine-tuned there, and even won a business school competition. Initial funding of $25,000 was obtained. This motivated the founder so much that he decided to return to his native country to launch his application.
In its early days, Anthony Tan's firm was known as MyTeksi. At the time, it was based in Kuala Lumpur, the Malaysian capital. Eventually, the company moved to Singapore, considered at the time to be a more favorable location for start-ups.
In 2012, the brand was rebranded as GrabTaxi. In the three years following its creation, the company enjoyed a meteoric rise thanks to various marketing operations and the profits earned from its delivery services. In 2016, the company was renamed Grab Holdings. After its metamorphosis, the company began to offer other services such as vehicle rental, tax services, food delivery and more. The company mainly targets the Thai, Vietnamese, Cambodian and Burmese markets, as well as a number of countries in Oceania. In areas where the company has established a presence, its application has nearly 180 million users.
Grab's strategies
In 2019, Grab will carry out an operation aimed at destabilizing its main competitor Go Jek, which is backed by Google and the Chinese company Tencent. In particular, the Singaporean firm will be raising $1.5 billion to establish itself on the Indonesian market. With this sum, the start-up's financing raised in one year amounts to almost $4.5 billion. Thanks to this financial maneuver, Grab intends to continue its conquest of Southeast Asia. Moreover, since its takeover of Uber in 2018, everything seems to be going well for this group.
The Grab application was initially designed to connect cab drivers with customers, but it quickly evolved. Later, it would be used for meal delivery. By 2020, Grab Holdings is growing exponentially. The company will be rushing into the food delivery market in Southeast Asia.
Partnership with hotel giant Marriott
To expand its services and maintain its place as Southeast Asia's leading meal delivery and VTC network, Grab is aiming for an alliance with Marriott International. The partnership agreement will be signed in October 2020. This coalition will benefit both companies, as their respective offerings will be able to complement each other. The positive points of this new alliance will take effect as early as one month after the partnership is signed. Thanks to Grab's application, it is now possible to make online reservations at the hotel group's restaurants and bars. The offer is valid in countries where Marriott is present, such as Thailand, Malaysia, Indonesia, Vietnam and the Philippines.
Thanks to this partnership between Grab and Marriot, guests of this hotel group who use the "GrabPay" application will be able to pay for their meals. The same applies to Marriot's transport reservations, which will be made via the Grab application. In addition, it will now be possible to accumulate points on the loyalty programs offered by both companies (GrabRewards and Marriot Bonvoy). Promotional offers are also on offer.
In 2021, Grab plans to create a $275 million endowment fund, which the company calls "GrabforFood". This fund, under the aegis of the group's founders, will be dedicated to supporting long-term social and environmental programs.
The group's meteoric rise
Thanks to its fast-growing sales, but above all to underline its supremacy, Grab is now present in 465 cities and 8 countries in Southeast Asia. The largest coverage is in Vietnam, Indonesia and Thailand. The group aims to be the number one VTC network in this part of the world. Its success is due in particular to the originality of its application, which does not operate solely in the VTC or delivery sector. Among other services, the "GrabPay" electronic wallet, for example, enables users to store money online, as well as to make purchases without using a bank card.
A look back at Grab's career
The company's history can be summed up as follows:
2011: the year marks a turning point in the life of Anthony Tan, Grab's CEO, as he wins a competition showcasing his project at Harvard Business School.
2012: back in his homeland, the group's founder decides to make his project a reality and launches the MyTeksi app, a cab booking service.
2013: in Malaysia, the MyTeksi application is a great success, and is so well known that it will soon be making inroads into other South East Asian countries. Its expansion will take place in Thailand and the Philippines, under the name GrabTaxi.
2014: in April 2014, the Singaporean start-up declared Series A funding. Two months later, it decides to launch its Indonesian operation. Later, in December, Grab continues to attract the attention of investors, so much so that Softbank, a Japanese company, will commit a substantial $250 million in a funding round.
2015: after raising $350 million, Anthony Tan's company is valued at $1.8 billion. This gives it the opportunity to become a Unicorn. In the same year, Grab established strategic partnerships with companies operating in its sector, notably home transport. These companies include Lyft, Ola and Didi, all competitors of Uber.
2016: to mark the expansion of its services across Southeast Asia, GrabTaxi gets a makeover and becomes Grab.
2017: to enhance customer loyalty, La Licorne launches GrabPay, a payment service for third-party transactions.
2018: a memorable year for the Singaporean company, which announced that it holds business from its American rival Uber in Southeast Asia. This was achieved through an equity transaction. In May 2018, Grab will pilot its food delivery service: "Grab Food". Then, in July, the firm is rolling out its "super app", which brings together a multitude of services via a single platform.
2019 and 2020: the company's valuation is estimated at around $14 billion! A year later, a partnership was formed with Singapore Telecommunications Ltd. Grab will subsequently obtain a full digital banking license.
2021: Unicorn goes public on Nasdaq.
Grab: key information
Workforce
The company employs between 5,000 and 10,000 people in several countries, mainly in Southeast Asia.
Sales figures
In 2020, the start-up achieved sales of $5.9 billion, representing roughly half of the country's delivery market.
Initial public offering
To make its Wall Street debut, Grab Holdings decided to enter into a partnership with a SPAC or Special Purpose Acquisition Company. With no operational activity, this is a company whose mission is to invest the funds acquired in order to gain in return an unlisted company.
Altimeter Capital Management is an American company specializing in technology investments. Grab took the gamble of merging with this company in order to gain a foothold on Wall Street. Success was immediate, as the Singaporean giant was valued at nearly $40 billion. The Silicon Valley firm invested $750 million in the deal. It was the largest share sale ever carried out on American soil by a company based in South-East Asia.
Business and strategic objectives
To remain profitable and stand out from the competition, the company is banking on the development of complementary revenue sources. Grab understands this, and that's why it's called "Super-app". Indeed, in addition to delivery and transport services, it also offers other online services such as insurance contracts, online banking and financial investment products.
Scalability
Grab has the opportunity to establish itself in a country experiencing very strong economic growth. At the same time, continued urbanization and the popularization of online shopping are working to the company's advantage. It has conquered the country and continues to expand internationally.
