Grab Stock: The Uber of Southeast Asia is hitting the US stock market - The Average Joe

    Grab Stock: The Uber of Southeast Asia is hitting the US stock market

    Victor Lei — Head of Research

    Victor Lei — Head of Research

    April 14, 2021

    Grab Stock

    April 14, 2021

    What happens when you jam Uber, Instacart and Square all into a single app? You get Grab — the super app of Southeast (SE) Asia.

    Grab stock: On Apr. 13, Grab announced its plans to go public on the US stock market by merging with SPAC, Altimeter Growth Corp ($AGC) — valuing Grab at $39.5b.

    The melting pot of apps

    Founded in 2012, Grab grew into a super app that offers a wide range of complimentary services throughout 8 countries in SE Asia (i.e. Singapore, Malaysia, etc.). Consumers use Grab’s app for ride-hailing, food/grocery delivery, online payments, hoteling bookings and more. Here’s a look a Grab’s numbers:

    • $1.6b in 2020 net revenue — up 60% from 2019
    • $2.7b in 2020 net loss — down from a loss of $4b in 2019
    • Grab’s market share in SE Asia: 72% of ride-hailing market, 50% of online food delivery market, 23% of digital wallet payments market

    Grab is the “Uber of SE Asia” and more…

    Both Grab and Uber generate nearly 85% of their business from ride-hailing and food delivery. They’re both largely unprofitable and Grab isn’t expected to break even until 2023.

    What makes them different? Uber and Grab are operating in completely different markets. Low download speeds/bandwidth in SE Asia force consumers to rely on super apps — giving Grab more growth potential:

    • Financial services (i.e. digital payments, banking services) makes up nearly 20% of Grab’s business
    • Deliveries (food/grocery) is Grab’s largest business — which grew from just $600m (transactions processed) in 2018 to $5.5b in 2020 — a 9x increase

    Compared to Uber, Grab is growing at a much faster rate in a larger market.

    For investors… The bigger growth story

    We’re finally starting to see big tech companies looking to go public from SE Asia, a region with massive population and growth potential:

    • More than 40m new internet users connected to the internet for the first time in 2020 — which leaves 40% of the population offline.
    • E-commerce market is expected to grow from $62b in 2020 to $172b by 2025

    Learn more: Prepare for a wave of Southeast Asia tech stocks about to go public

    How can you get in on Grab stock early? Grab is merging with Altimeter Growth Corp., which is publicly traded as $AGC. Once the merger is completed, AGC will turn into Grab and the ticker will change to $GRAB.

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