For the first time since its launch, Southeast Asia’s ride-hailing major Grab is on tract to hit $1 billion revenue this year based on its current revenue run rate, according to a Grab spokesman.
Grab told DEALSTREETASIA that the $1 billion that Yicai earlier reported as the company’s annual revenue to date was actually Grab’s revenue run rate.
“The $1-billion figure refers to Grab’s revenue run rate, rather than its annual revenue to date, meaning Grab is on track to do $1 billion in revenue this year,” the spokesperson said.
The Yicai report earlier quoted Grab President Ming Maa as saying that Grab has made history by becoming the first transportation technology firm in Southeast Asia to hit annual revenues of more than $1 billion.
Despite crossing $1 billion in annual revenue, Grab has not considered breaking even. Maa said the company continues to invest heavily in financial services and has not yet considered profitability.
True enough, Grab has been expanding at a breathtaking pace – from June 2017 to June 2018, it expanded into 162 new Southeast Asian cities.
“This year is a critical year for the entire industry but the acquisition of Uber gives us a competitive edge in Southeast Asia,” Maa was quoted as saying.
Grab had in March acquired rival Uber’s Southeast Asia operations, including the latter’s ridesharing and food delivery businesses. Uber had, in return, picked up a 27.5 per cent stake in the Singapore-headquartered firm, which Uber CEO Dara Khosrowshahi had said was worth “several billion dollars”.
In an interview with CNBC, Grab co-founder and Group CEO Anthony Tan had explained the valuation thus: “One was obviously, it was an indication of market share and we are clearly in a market leadership position and number two was the other assets that they were thinking about us, we were thinking with them.”
In June 2017, Grab announced raising $2.5 billion from Didi Chuxing and SoftBank Group, marking Southeast Asia’s largest-ever single round of financing. The funding round is said to have valued Grab at more than $6 billion.
Early last month, Grab was reported to be in talks to raise up to $1 billion in fresh funds that could value the Singapore-based firm at about $10 billion. The funding round would be Grab’s eighth equity raise since its first funding in 2012.
Grab, which is seen as the flag-bearer in the Southeast Asian tech startup ecosystem, has, in its six-year journey, already made a few investments and acquisitions. It acquired Indonesian startup Kudo, India’s iKaaz and, in a recent move, partnered with in-car commerce startup Cargo to enable its drivers to earn extra money through in-car commerce.
Maa announced Grab’s annual revenue following reports that its Indonesian rival, Go-Jek, has received an offer of at least $1 billion of new funding from existing investors eager to accelerate its overseas expansion, especially in Singapore, Vietnam, Thailand, and the Philippines.
Current backers including Tencent Holdings Ltd., China’s biggest internet firm, and Warburg Pincus have reportedly informally discussed providing more funding to ensure Go-Jek’s first forays outside its home market are successful.
Grab, however, continues to dominate the region’s ride-hailing market, with over 100 million app downloads and more than 6 million daily orders.
Maa said the Southeast Asian market is very promising for ride-sharing players because the region’s private car ownership is too low and the public transportation is not fully developed.
The company is also riding on the favourable demographics in Southeast Asia, a region with over 600 million people where the internet penetration is estimated to touch over $200 billion by 2025.
Grab recently launched its innovation arm, Grab Ventures, that will invest in startups in sectors like mobility, fintech, logistics, and food-tech.
The new venture arm will look at Series B funding rounds and beyond and be funded from Grab’s own balance sheet, co-founder and group CEO Anthony Tan said during the launch of Grab Ventures at the Innovfest Unbound 2018 event in Singapore.
The company now has businesses like GrabFood, GrabPay and currently offers services in Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar, and Cambodia.
“Grab is focused on creating a seamless experience and unlocking value for our customers by offering complementary services on one platform,” said Lim Kell Jay, head of Grab Singapore.
This story had been updated based on clarification from Grab.