FinTech: Grab Could List In The U.S. Through A Merger With A Blank Check Company

March 11, 2021 | FinTech, News, Venture Capital

Grab is Southeast Asia’s most valuable startup.

Grab Holdings Inc, which is backed by SoftBank (TYO: 9984), is considering the SPAC route to a U.S. listing, according to a Bloomberg report. Previously we reported that the startup, whose businesses span everything from food delivery to ride-sharing, insurance, financial services, and investing, was considering a traditional IPO in the U.S. worth more than $2 billion.

Grab is said to be currently valued at over $16 billion. In December, the fintech giant and Singtel (SGX: Z74) received a license to operate a digital bank in Singapore. Grab will hold a 60% stake in the banking consortium, with Singtel holding the remaining 40%. The bank is expected to launch in early 2022.

Grab’s SPAC merger?

According to Bloomberg, JPMorgan Chase & Co. and Morgan Stanley, who were already advising Grab on its IPO, are scouting for a suitable special purpose acquisition vehicle (SPAC) that could merge with, and thereby list, the startup.

A SPAC, or blank-check company, is a listed shell company that has raised money from the public through an IPO and will acquire a startup using those proceeds. The startup gets a quick and easy route to a stock exchange listing – one that is less expensive and cumbersome compared to a traditional IPO.

Grab is coming off an unsuccessful, Softbank-supported bid to merge with rival Gojek. Gojek is now in talks with Tokopedia, and the two companies were said to have inked a conditional sales agreement for a merger. The combined company, estimated to be valued between $35 billion to $40 billion, would list on the Indonesia Stock Exchange.

However, Tokopedia has today denied these reports, dismissing them as “inaccurate and purely speculative.”

SPACs craze

SPACs are currently a red-hot trend on Wall Street.

In the US, 235 vehicles have raised $72 billion this year, according to Refinitiv.

This is within handshaking distance of the record-breaking $78 billion mopped up by 244 SPACs last year.

Related Story:  On Rebound From Failed Gojek Merger, Grab Mulls $2B U.S. IPO

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