US: Altimeter Growth Corp brings Grab to Nasdaq

  • 13 April 2021
The SPAC by Altimeter Capital Management to merge with Asia’s largest meal ordering and delivery app
Photo as seen on Flickr by Dennis Sylvester Hurd

Grab Holdings Inc, the parent company of meal order and food delivery app Grab prepares to go public via a merger with blank-cheque company Altimeter Growth Corp, a special purpose acquisition company, (SPAC) listed on Nasdaq. NutritionInvestor reported on the deal last week.

The SPAC merger is said to be the largest-ever US equity offering by a Southeast Asian company. The proposed transactions value Grab at an initial pro-forma equity value of approximately $39.6 billion.

The deal includes a private investment in public equity (PIPE) of more than $4 billion and will provide Grab with approximately $4.5 billion in cash proceeds.

Altimeter has also committed up to $500 million to a contingent investment to be equal to the aggregate dollar amount of redemptions from Altimeter Growth’s shareholders.

The PIPE was led by funds managed by Altimeter Capital Management, which committed $750 million, with participation from funds and accounts managed or advised by BlackRock, Counterpoint Global, and T.Rowe Price Associates, as well as Fidelity International, Fidelity Management and Research, Janus Henderson Investors, Mubadala, Nuveen, Permodalan Nasional Berhad and Temasek.

Leading family groups from Indonesia including Djarum, the Sariaatmadja family and Sinar Mas also participated in the PIPE.

The combined company expects its securities will be traded on Nasdaq under the symbol GRAB in the coming months.

Grab – a super app

Grab is dubbed a ‘super app’ because It offers services across mobility, deliveries, financial services in an all-in-one app.

Anthony Tan, co-founder and Group chief executive at 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.”

Southeast Asia is one of the fastest growing digital economies in the world, with a population approximately twice the size of the US. Yet online penetration for food delivery, on-demand mobility and electronic transactions are a fraction of the US and China.

Across online food delivery, ride-hailing and digital wallet payments, Grab expects its total addressable market to grow from approximately $52 billion in 2020 to more than $180 billion by 2025.

Brad Gerstner, founder and chief executive 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.”

Grab’s decision to become a public company was driven by strong financial performance in 2020, despite Covid-19. Grab posted Gross merchandise value (GMV) of approximately $12.5 billion last year, 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 approximately 72% of total regional GMV for ride-hailing, 50% of total regional GMV for online food delivery and 23% of regional TPV for digital wallet payments in 2020.

Grab is not yet profitable, but it has made significant strides towards profitability with a key focus on building a resilient business and delivering sustainable growth, achieving positive segment EBITDA in mobility across all markets, and positive segment EBITDA in deliveries in five out of six countries.