Quick Expansion Across Asia
The ride-hailing startup Grab, and one of its divisions, were seeking a 5-year loan of $750 million for general business purposes. Since it launched as a ride-hailing app operator, Grab has recorded success and quickly expanded to now offer a variety of services including food delivery, payments, and insurance.
The company became the most-valuable startup with a market valuation of over $15 billion.
“In addition, we’ve hit our growth and profitability targets, and reached several new milestones,” Ming Maa, president of Grab said.
“We’ve continued to be disciplined with spending and prudent in stewarding our shareholder capital, with monthly EBITDA (earnings before interest, tax, depreciation and amortisation) spend being reduced by approximately 80% over the last 12 months,” Maa said.
The Singapore-based company said its revenue climbed to over 95% of pre-pandemic levels in October, while its food business represented over 50% of its total revenue. Revenue in its food business almost tripled year-over-year in Q3 and is set to reach the breakeven point by the end of this year.
“We expect our food delivery business to achieve breakeven by the end of 2021, after having recorded positive EBITDA in several countries in Q2 2020,” Maa added.
Reuters also adds that Grab and its Indonesian rival Gojek are holding talks about a potential merger. Earlier in December, Bloomberg reported that two platforms made progress in merger talks to create the biggest Internet merger in South-east Asia.
The two rival companies may be considering a merger due to several reasons. Grab holds a strong position in the ride-hailing and food delivery sectors, particularly in Singapore, while Gojek is well-positioned in Indonesia. The two companies have been competing with each other and other rivals for years to protect their market shares.
However, it seems that large investors are likely driving the two companies to shift away from price wars and their current marketing strategies, and move toward reinforcing their market positions to achieve the ultimate business goal of profitability.
Singapore-based ride-hailing company Grab is seeking a five-year loan of $750 million for general corporate purposes after seeing its revenue climb by about 70% in 2020. In the meantime, talks between Grab and Indonesia-based rival Gojek are in advanced stages.
About the Author
Avi Ben Ezra is the Chief Technology Officer (CTO) and Cofounder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.