FinTech: On Rebound From Failed Gojek Merger, Grab Mulls $2B U.S. IPO
The ride-hailing startup is attracted by boom conditions in the U.S. IPO market.
Reuters said in an exclusive report on Monday that Southeast Asian ride-hailing, food delivery, and fintech giant Grab was considering a US IPO this year. The news agency quoted three sources familiar with the matter, saying the IPO could be worth as much as $ 2 billion. (Reuters)
Grab is a Singapore-based startup that started as a ride-hailing venture in Malaysia in 2012. It is likely to be currently worth more than $ 16 billion. It was negotiating for a merger with Indonesian rival firm Gojek, but those talks have fallen through. According to Bloomberg, Gojek is now negotiating an $ 18 billion merger with Indonesian e-commerce giant PT Tokopedia.
The sources told Reuters that Grab’s plans for an IPO, including its size and timing, are still to crystallize. They would also depend upon financial market conditions.
At $ 2 billion, the potential IPO from the fintech giant would be the largest foreign listing by a South-East Asian entity.
One source told Reuters that all its businesses were doing better than before and that market conditions were good.
The public markets would, therefore, respond well to the flotation, the source said.
“The U.S. stock markets are booming and that attracts the attention of foreign companies who see an option to capitalize on it,” Constellation Research Inc. analyst Holger Mueller told Silicon Angle. “U.S. shareholders are already educated about ride-sharing and food delivery IPOs, so this may well work out for Grab, especially considering the overall high economic dynamics in Asia.”
However, the company did not offer any comment to Reuters.
Grab Financial scores $300M funding
Last week, Grab Financial Group, a subsidiary, closed a Series A funding round of more than $ 300 million led by Hanhwa Asset Management, with participation from K3 Ventures, GGV Capital, Arbor Ventures, and Flourish Ventures.
The round valued Grab Financial at $ 3 billion following the growth in its total revenues of more than 40% in 2020 compared to 2019.
According to Reuters, Grab’s ride-hailing business is now breaking even in all operating markets. Further, the food delivery business could break even by the end of this year.
Last month, Grab and Singtel 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.
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