GrabTaxi is one of Southeast Asia’s hottest startups. Here’s how it’s kicking ass

Malaysia boleh. From just one of many startups dotting the landscape, GrabTaxi – or MyTeksi, as it’s known in its native Malaysia – has in three short years become the pride of the country’s startup scene, and the next flagbearer of its technological ambitions.

That was evident when I attended a session at the launch of the MaGIC Startup Academy in Kuala Lumpur. When the instructor asked for examples of disruptive companies, MyTeksi was the first name that came up. I sensed a murmur of agreement in the room.

At a press conference today, GrabTaxi CEO Anthony Tan described his company’s modest beginnings. How does an unknown startup get Kuala Lumpur’s busy taxi drivers interested in a mobile app? Tan started by going door-to-door to ask the biggest taxi fleet companies to try his product.

“The first one would say no, and tell me to go back to the family business as it’s much easier. ‘Don’t sell this stupid app. Nobody will use it. Taxi drivers will steal your phone – they’re terrible people.'” Despite being the grandson of one of Malaysia’s preeminent auto tycoons, Tan still needed to slug it out like any other bootstrapped founder. Only the fifth taxi company he approached, operating a small fleet of 30, gave him a chance.

GrabTaxi’s progress validates his team’s efforts. He unleashed a slew of data showing how far it has come, and far it can go.

The company raised US$90 million in 12 months from hedge fund Tiger Global, prominent Chinese venture capital firm GGV Capital, Vertex Venture Holdings (subsidiary of Singapore sovereign wealth fund Temasek Holdings), and more.

Far from being just an investor magnet, GrabTaxi has become popular with both cabbies and passengers. Here are more regional numbers to chew on:

• 2 bookings are made every second on the app. That’s about 5.1 million bookings a month
• 50,000 registered drivers
• Operating in 16 cities (soon 17)
• 2.1 million app downloads
• 400,000 monthly active users

The startup doesn’t disclose exact revenue and valuation numbers, but we can make a guesstimate. GrabTaxi makes money by taking a cut of booking fees, but the exact fee varies according to the distance of the trip, the location, and time of day. It sometimes doesn’t even collect fees in markets it has just expanded to, such as Jakarta, Indonesia.

But we know it collects about S$0.30 a ride in Singapore, which is probably higher than Indonesia and Philippines, where taxi drivers earn less booking fees. An upper estimate, therefore, would put GrabTaxi’s annual revenue at US$13 million.

Valuation-wise, it’s highly unlikely that GrabTaxi is a unicorn (beyond US$1 billion) like Garena and VNG.

Let’s say the US$65 million series C investment figure is in the ballpark, and my revenue estimate is reasonable. The big unknown here is how much equity the firm is giving up at this stage. Either the investors are willing to accept insane revenue multiples, or they’ve taken a large chunk of equity (say 30 to 40 percent) for the numbers to work.

In any case, startup valuations are a wildly imprecise art, so take these postulations with a pinch of salt.

How it kept on growing

Room for two