The Singapore-based ride-hailing and deliveries firm will buy all of Jaya Grocer’s ordinary shares and 75% of the company’s preference shares for an undisclosed amount, according to a filing on Tuesday with the U.S. Securities and Exchange Commission. The deal could be worth as much as 1.8 billion ringgit ($425 million), the Edge reported.
Grab shares dropped 5.30% to close at $6.79 on the Nasdaq overnight. While the merger with blank-check company Altimeter Growth Corp.—which facilitated its backdoor listing in the U.S.—valued the company at $40 billion, the stock has tumbled about 48% since its market debut on December 2.
Jaya Grocer will help GrabMart—Grab’s grocery delivery service—strengthen its footprint across Malaysia, where the grocery chain operates 40 stores primarily in the Klang Valley area comprising Kuala Lumpur and the state of Selangor. To comply with Malaysian regulations, Grab said half of the voting shares in Jaya Grocer will go to a local investor. The deal is expected to be completed in the first of quarter of 2022.
Grab started grocery deliveries in 2019 before the Covid-19 pandemic wreaked havoc on the region’s economy, driving ride-hailing revenues across Southeast Asia lower. Despite the weakness in the ride-hailing business, the group’s gross merchandise value increased 32% to a record $4 billion in the third quarter, bolstered by the 63% jump in GMV for food deliveries to $2.3 billion.
The superapp has been expanding its deliveries business as the pandemic accelerated the adoption of e-commerce and other digital platforms. Online grocery deliveries are among the fastest growing segments of e-commerce in Southeast Asia, with Euromonitor International expanding the category to expand at a compound annual growth rate of 24% in the next few years, reaching almost $12 billion by 2025.
In November, GrabMart signed partnerships with supermarket and grocery chains across Indonesia, Malaysia, the Philippines, Thailand and Vietnam. At the same time, it tied up with e-commerce firm Lazada to provide same-day delivery services to consumers in Singapore via GrabExpress.
Cofounded in 2012 by Anthony Tan and Tan Hooi Ling as a taxi-booking app, Grab has since grown to become a superapp by expanding its business to ride-hailing, food deliveries and digital financial services. The company now serves customers in more than 400 cities across Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.