The ride-hailing firm’s rocky path highlights Asia’s Silicon Valley ambition challenges.
With 35 million monthly users spanning 8 countries, Grab reported US$1.4 billion in revenue last year and holds a market value of over US$13 billion.
Even the date of Grab’s listing seemed auspicious. It read the same backward and forward: 12 02 2021. An eight-digit palindrome date will happen only 12 times this century. Grab’s stock slump represented a blow to its home base: Singapore. Since its independence in 1965, the city‑state of 5.9 million has prospered because it welcomes and supports industry and trade, ultimately becoming a hub for commodities and finance. Why not tech, too?
Two other Singapore-based companies are neighbours: Razer, which makes computer-gaming laptops, mice and headsets, and Sea, which developed the hit battle royal game Free Fire and whose Shopee e-commerce site competes against Amazon.com. The three Singapore tech companies are still very much in operation, and their stories remain to be told. Tan and other Grab executives have voiced confidence in the company’s future. “The feedback from our investors has been positive on the progress we are making toward profitability and balancing sustainable growth,” the company said in a statement.
Tan grew up in Malaysia and started his business in a storage room 11 years ago. In the country’s capital, Kuala Lumpur, his company, then called MyTeksi, let customers summon a taxi with a smartphone. SoftBank committed US$250 million to Tan’s business. In 2014 the company moved to Singapore and later changed its name to Grab as it prepared to accelerate its expansion across the region.
The experience made me curious, professionally, about the risks of fast-growing tech companies suddenly taking over the streets of cities around the world—not only Grab, but also its rivals. I wrote all this up in a feature for Bloomberg Businessweek that raised questions about safety, which Grab says has improved.
By 2020 investors saw Grab as a promising candidate to go public. Tan eventually settled on an exit strategy: the SPAC, also known as a blank-check company. Grab had raised US$12 billion in venture financing before the SPAC deal, according to data company Crunchbase. On a micro level, the math was grim. Grab spent US$480 to win a customer, who’d then spend an average of US$29 a year.
For example, Tan controls 63% of Grab’s voting rights while holding only about 3% of its common stock. While technology companies often use dual-class share structures, Grab’s arrangement is striking because Tan owns such a small percentage of common shares compared with, say, Mark Zuckerberg, who holds a roughly 13% stake in Facebook parent Meta Platforms Inc.
To be sure, Uber had an easier road back. It can rely on its home market, the largest economy in the world. Singapore, while wealthy, is too small to support fast-growing consumer companies; some of Grab’s other Southeast Asian markets are difficult places to earn a profit quickly. And each market has its own languages, customs and regulations, making it a challenge to grow.
Grab remains a substantial business with about 35 million monthly users. Operating in eight countries and more than 500 cities, it posted revenue of US$1.4 billion last year, and its market value is more than US$13 billion. It’s a household name in the region; its logo—“Grab,” often written with two green lines that curve like a roadway—is a familiar sight from Bangkok to Borneo. The vast majority of analysts covering Grab recommend its shares.
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