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Interview

Grab to stay focused on 'massive' ASEAN growth after US listing: CEO

Anthony Tan sees expansion for delivery and fintech in 'underpenetrated' region

"We're actually stronger now than before" the pandemic, Grab co-founder and CEO Anthony Tan, pictured here in 2019, told Nikkei on April 13. (Photo by Kosaku Mimura)

SINGAPORE -- Singapore's tech unicorn Grab will remain focused on Southeast Asian markets even after it goes public in the U.S., co-founder and CEO Anthony Tan told Nikkei, citing "massive" room for growth in a region that has drawn attention from international investors.

Noting that investors describe Southeast Asia's most valuable unlisted company as a combination of tech names like Uber Technologies and Ant Financial, Tan stressed Grab will scale up its existing core businesses such as food delivery and digital finance.

"We are going to be focused on the region," he said in an online interview Tuesday, the same day Grab announced it will go public through a merger with a special purpose acquisition company (SPAC).

Tan added the company will use the capital "to build the lowest cost and the most efficient delivery network" by investing in maps and other technology as well as "to revolutionize mobile payments, financial services and digital banking."

Through the SPAC, Grab will merge with Nasdaq-listed Altimeter Growth Corp., which was set up under the U.S.-based Altimeter Capital, in coming months. The listing is expected to value Grab at $39.6 billion and will provide as much as $4.5 billion for the company.

Grab won a digital banking license in Singapore last year and expects to start services early next year.

"We're really going to keep building on [digital banking] and make it very scalable," Tan said.

Grab's main competitor Sea, Singapore-headquartered and New York-listed online gaming and e-commerce giant, is already beginning to expand into Latin American markets such as Brazil. This poses a question that Grab may also expand out of the region.

Tan said that Southeast Asia has nearly double the population of the U.S., with 670 million people, and its adoption of online services, from mobility to delivery to e-payment, is still low. "It is very, very underpenetrated. Room for growth is massive."

The Harvard Business School graduate also said the company, founded in 2012 as a taxi-booking app, is focused on the region because of the partnerships with local companies as well as local governments.

Asked why the company decided to go public now, Tan said his company is "in the best position" to do so after its gross merchandise value in 2020 surpassed pre-pandemic levels.

"Despite COVID, we came out of 2020 stronger than ever, which shows the resilience of our business.... We're actually stronger now than before."

The deal with Altimeter Capital was "the best way for us to go public," Tan said, because the Silicon Valley-based firm has secured "a solid cap table" -- from strong investors such as BlackRock, Fidelity International and Temasek Holdings.

Revealing earnings details Tuesday, Grab reported a net loss of $2.7 billion for 2020 -- which may make a $39.6 billion valuation seem too high to some. On this point, Tan said: "We have been seeing many investors describe us as Uber plus DoorDash plus Ant. And that's the comparable establishment."

Looking ahead, one focus for the company is whether Grab's existing investors will sell their shares in the company, especially its biggest backer SoftBank Group, which invested billions of dollars in the company including through its Vision Fund.

While that decision rests with the investor, "my understanding is that companies like SoftBank who have a large stake in us will continue to be supportive," Tan said. Tan said he "just spoke to Masa [SoftBank founder and CEO Masayoshi Son]," whom he called a mentor. 

The board members of the new company have not been decided yet, Tan said. But he said "we will keep evolving our corporate governance accordingly to make sure we have a diversified board" as it transitions to a public company.

"We're going through a nominating committee process and we will continue to consult the current board to make sure we find a very, very strong board."

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