Singapore trio poised for US$1.2 billion from record Grab SPAC
(Bloomberg) — The SPAC boom may be deflating after more than a year of frenzy, but it’s still creating vast riches for the right deals.
Take Grab Holdings Inc., Southeast Asia’s ride-hailing and delivery giant, which is combining with Altimeter Growth Corp. and plans to go public in the U.S by July.
The transaction will give the Singapore-based company a market value of US$39.6 billion, up from a valuation of US$16 billion earlier this year.
For co-founder and Chief Executive Officer Anthony Tan, who’ll hold 2.2% of Grab after the deal, that means his fortune will surge to US$829 million, based on the stock he’ll own. The shares co-founder Hooi Ling Tan and President Ming Maa will be worth US$256 million and US$144 million, respectively, according to the Bloomberg Billionaires Index.
Shares of the SPAC are trading almost US$3 above the deal price, meaning that the CEO could soon become a billionaire. A Grab representative declined to comment.
‘Positive Reaction’
“The market’s positive reaction to the Grab merger signals strong investor enthusiasm for transportation technology and the future of mobility,” said Asad Hussain, senior analyst for mobility technology at research and data provider PitchBook. “We expect continued growth.”
The two co-founders met at Harvard Business School while working on their MBAs between 2009 and 2011. They came up with an idea for delivering safe taxi services in their home country of Malaysia, and Anthony Tan gave up his family’s business, one of the nation’s biggest auto distributors, to focus on the plan.
In 2012, the two started a cab-hailing app known as MyTeksi, which later relocated to Singapore after raising money for a regional expansion. The startup, rebranded as Grab in 2016, now encompasses food delivery, online payments and financial services.
The company generated US$1.6 billion in adjusted net revenue in 2020, according to a filing last week. It is forecasting earnings before interest, taxes, depreciation and amortization will turn positive in 2023 with adjusted net sales growth of 42% for the next three years.
Like some other startups about to go public, Grab has created an endowment fund for partners and Southeast Asian communities. In its first effort, GrabForGood will provide support for Covid-19 vaccinations. The initial funding is estimated at US$275 million in cash and shares, with the company’s two co-founders and Maa pledging a combined US$25 million of their stock.
“I don’t track how much I have because it doesn’t matter,” Anthony Tan said in an interview. “We’re blessed to be able to take Grab public, and we’ve set up the GrabForGood endowment fund to ensure that our commitment and resources to serve the community will continue to grow even as the company grows.”
SoftBank, Uber
While Grab’s listing is boosting some individual fortunes, the biggest beneficiary is Japanese conglomerate SoftBank Group Corp., which injected about US$3 billion into the firm through a series of investments starting in 2014. After the deal, its Vision Fund will own an almost 19% stake worth about US$7 billion. Uber Technologies Inc. and Didi Chuxing Technology Co. will have holdings of US$5.4 billion and US$2.8 billion, respectively. Some family offices have also bought in, including Man Capital of Egyptian billionaire Mohamed Mansour.
Asian firms linked to the tech industry have been doing well in their U.S. debuts. South Korean e-commerce giant Coupang Inc., also backed by SoftBank, surged 41% when it started trading in New York last month after pricing its initial public offering above a marketed range and increasing the size of its share sale. That made Coupang founder Bom Kim one of the world’s richest people.
While the enthusiasm for SPACs has been receding amid a U.S. Securities and Exchange Commission crackdown, PitchBook’s Hussain is optimistic.
“Investors look at the reaction to the Grab SPAC and see that as a positive sign that U.S. equity markets are in a very suitable environment to be in right now,” he said. “The success of the Grab SPAC will pave the way for more Southeast Asian startups in particular to consider listing through SPACs.”
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