Southeast Asia’s ride-hailing giant Grab plans to raise about $2 billion in an initial public offering (IPO) in the US and has picked Morgan Stanley and JP Morgan to work on the deal.
This development was first reported by Bloomberg.
According to the report, the listing may happen as soon as the second half of 2021. It added that Grab’s offering details are still in the deliberation process, with more banks to potentially be added in the coming months.
Grab, a SoftBank Vision Fund portfolio company, was previously in talks to merge with Indonesian ride-hailing rival Gojek just last year. Those discussions appear to have fallen apart, following news that Gojek had entered merger discussions with Indonesian e-commerce giant, Tokopedia, instead. Gojek and Tokopedia are likely to head for a traditional IPO if merger talks are successful.
Traveloka, another Indonesian unicorn, is also eyeing a US IPO, as it seeks to position itself as a company significantly larger than what its namesake suggests. The firm has branched out beyond its core online travel business, setting up new verticals in areas like financial services, food and restaurant booking.
Grab’s plans to list comes amidst a recent flurry around IPO and SPAC announcements among Southeast Asia’s internet unicorns, signaling a growing urgency to raise more capital amidst an ailing global economy and raging pandemic.
The COVID pandemic has not been kind to ride-hailers like Grab and Gojek, both of which were forced to lean more heavily into their food delivery and logistics verticals in 2020 while taking steps to optimise costs across the group.
Fundraising has also been slow.
Grab was last reported in September to be raising $3 billion from China’s Alibaba Group. This fundraise has yet to materialise, following the November crackdown by Chinese regulators on Ant Group’s IPO and its subsidiaries. Chinese authorities meanwhile are still in talks to force Ant Group to divest its investments to fragment the Chinese giant’s clout over the internet economy.
In the meantime, NYSE-listed Sea Group has been getting a leg up thanks to the euphoria in US public markets. The Singapore-based juggernaut which operates Shopee, one of the region’s largest e-commerce players, raised $2.6 billion in an upsized share offering by issuing American Depository Shares (ADR) in the NYSE in December.
The firm has already begun doubling down on sectors like fintech, having secured a digital bank licence in Singapore and acquired Indonesian bank BKE to ramp up its digital payments arm in Southeast Asia.
Competition among Southeast Asia’s tech unicorns will be rife this year. Apart from financial services, several of these internet unicorns – including Grab, Tokopedia, Gojek and others – are also beginning to collide in e-commerce and last-mile logistics as they fight for greater market share in the region.