Week In Review: “Anything is possible” says Grab’s Anthony Tan on an IPO

By Karamjit Singh September 23, 2016

IPO just another step in ensuring stakeholders are rewarded
Funding at higher valuation, grew nearly 4x since Series E in Aug 2015

HAVING raised US$750 million (RM3.09 billion), a record for a South-East Asian (SEA) startup, all eyes are on Grab. While the obvious questions are around how they are going to invest that money to strengthen their presence in SEA and when Uber will double down on the region, as I noted in my article, the bigger question is about Anthony Tan, Grab’s co-founder and CEO, taking the IPO route as the best way to build value as a trade option is not likely with its current valuation. While there is no indication of what that is, it is likely beyond the appetite of any Brick & Mortar player.

But that listing may not even happen. One intriguing scenario, according to a Singapore-based VC is that Tan may just fold Grab into a Didi Chuxing listing, riding on the story of a dual China-SEA dominance play.

Meanwhile Grab got back to me Wednesday with Tan’s response on the possible listing. “Anything is possible… ,” he said, adding, “An IPO is really just another step in the journey of ensuring the business is well capitalized and that our stakeholders are able to be rewarded for their commitment and hard work.”

The funding now gives Tan plenty of ammunition to further build value in the company, which he highlights, “grew nearly 4x since its Series E in Aug 2015.”

On whether the round was financed by issuing ordinary or preference shares, Tan says, “The round was all equity and was done at a higher valuation than the last round. There were no special or preferential terms. Other specifics of the deal are confidential,” he said, adding that no investors exited at this round.

He also tells DNA that Grab will continue making strategic investments in product, technology, driver recruitment, user experience, and other areas as they extend their market leadership.

That market leadership battle will be mainly fought in Indonesia. As Tan emphasises, “This round is about continuing to grow our core transportation platform with a focus on Indonesia, as well as to build out our proprietary payments platform, GrabPay.”

Readers may also question why Grab wants to build its own payments platform but the answer to that is simply, data. As the regional head of a global telco shared with me yesterday, he thinks Uber’s main play in the future is going to be around the data it is collecting. I can only assume that Grab is moving along a similar path, hence the need to build its own payments platform.

Do you think Grab and also Uber are going to be able to monetize the customer data they collect just from the travel patterns of their users? I always thought their future was in offering 1-hour delivery services or some other time sensitive service with all the vehicles they have on the road.

What’s your thinking on a Grab IPO and what its real play will be?

As you mull that, also keep an eye on Indonesia's Traveloka that is now expanding into SEA. Considered one of Indonesia's unicorns, the 2012 formed startup has been quiet about how much it has raised and naturally about its revenue. Yet, one indication of how much it has raised comes from this stat. According to TV advertisement research company Adstensity,Traveloka spent a jaw dropping US$39.8 million for TV advertisements in 2015!