Grab Holdings will start trading on the Nasdaq tomorrow after Altimeter Growth Corp.’s shareholders approved the merger with Southeast Asia’s superapp giant, completing one of the world’s biggest transactions involving a special purpose acquisition company, or SPAC.
The deal, which values Singapore-based Grab at $40 billion, was approved by Altimeter’s shareholders on Tuesday and will close today subject to the satisfaction or waiver of customary closing conditions, Altimeter said in a statement. Grab has previously said it will raise $4.5 billion from the listing.
The fresh funding will come handy as Grab competes with Indonesian tech giant GoTo and Shopee owner Sea Group for dominance in Southeast Asia’s booming digital economies. 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. It serves customers in more than 400 cities across Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Fintech is particularly important for Grab, which will launch a digital bank in Singapore next year in partnership with telecommunications giant Singtel. In 2017, the superapp launched GrabPay, offering loans, insurance, wealth management and digital payments. “Millions of consumers, when thinking about GrabPay, they think I can pay now, I can pay later, I can pay anywhere,” Anthony Tan said in an interview published by Forbes Asia last month.
Southeast Asia is among the fastest growing regions in the world, with gross merchandise value from the digital economy climbing 49% to $174 billion this year from the previous, according to a new study jointly published by Google, Temasek and Bain & Company in November. As consumers across the region increasingly embrace e-commerce and other digital platforms, the study predicts Southeast Asia’s GMV to grow to $363 billion by 2025 and surpass $1 trillion by 2030.
With the huge potential of Southeast Asia’s digital economy, Nirgunan Tiruchelvam, Singapore-based head of consumer equity research at Tellimer, recently raised his target price for Altimeter to $20 apiece from $16.50 ahead of the Grab listing. The stock closed up 1% at $12.72 on Tuesday.
“Southeast Asia is at the cusp of a major digital transformation—60 million people entered the digital economy because of Covid,” Tiruchelvam says in a LinkedIn video as he reiterated his buy recommendation on Altimeter. “This raises the scale of opportunity for Southeast Asia’s ride-hailing and food delivery giant Grab.”
Despite Grab’s continuing losses in its third-quarter results, Tiruchelvam said the outlook looks promising. While the ride-hailing business was impacted by the renewed spike in Covid-19 infections across Southeast Asia, particularly in Vietnam, food deliveries surged and digital financial services gained traction, he said in a research note.