What we learned from Grab’s latest financials

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Hello readers,

I’ve talked about this before, but one of the things founders and venture capitalists alike have cited as a challenge facing Southeast Asia’s startup ecosystem is the scarcity of exits in the region. After all, without successful exits, there isn’t a “proven thesis” that Southeast Asia’s startup scene is on track to greatness.

But that’s set to change. Regional super app Grab is going public via a special purpose acquisition (SPAC) vehicle, and it’s set to be the largest SPAC deal on record.

At Grab’s latest investor presentation, we got a look at some of its numbers – and found some interesting insights.

Today we look at:

• Some revelations about Grab’s financials
• How this startup is helping indie game developers stack up against the big boys
• Other newsy highlights such as Bukalapak’s latest investment from BRI and Tencent Music’s new leadership

PREMIUM SUMMARY

What we learned about Grab’s financials

Grab has come far from its days as a ride-hailing app in Malaysia, and the wheels are now in motion for its debut on the public market. The regional tech giant has always guarded its financials very closely, and its recent investor presentation turned up a few surprises.

• Delivery is king: Mobility – namely the ride-hailing services that put Grab on the map – is no longer the company’s biggest segment. Delivery, which saw an uptick in 2020 as a result of the pandemic, is now the biggest contributor to its revenue, making up 49% of its total revenue in 2020.
• The road to profit: Grab’s EBITDA (earnings before interest, taxes, depreciation, and amortization) loss margin for 2020 was -47%. For comparison, Uber’s EBITDA margin in 2018 – the last full year prior to its US listing in 2019 – was around -18%. To reach profitability by 2023, Grab needs to scale its financial services to achieve positive unit economics, while at the same time improve margins on its mobility and delivery units.
• Ripe with potential: Grab’s US$39.55 billion valuation by Altimeter Capital Management, the sponsor of the SPAC vehicle through which Grab is going public, was a surprise. But even more surprising is that Altimeter agreed to a three-year lock-up of the shares it will receive from Grab for facilitating the process – an indicator of its confidence in Grab’s prospects.

Read more: 6 surprises from the reveal of Grab’s jealously guarded financials

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