SoftBank-backed Grab agrees to go public in world's largest SPAC merger

Southeast Asia’s ride-hailing big Grab introduced Tuesday it’s set to go public via a SPAC merger with Altimeter Growth Corp., in a deal that values the corporate at $39.6 billion — the largest blank-check merger to date.

Grab says it intends to record on the Nasdaq beneath ticker image GRAB following the deal’s completion.

Special goal acquisition firms are shell firms arrange to elevate capital to purchase non-public firms. A SPAC itemizing bypasses Wall Street’s conventional IPO course of. Altimeter Growth’s inventory rose greater than 8% in premarket buying and selling after the announcement, from its earlier shut of $13.95 a share.

As a part of the deal, SoftBank-backed Grab will obtain about $4.5 billion in money, which incorporates $4 billion in a non-public funding in public fairness association, managed by BlackRock, Fidelity, T. Rowe Price, Morgan Stanley’s Counterpoint Global fund and Singapore’s sovereign wealth fund Temasek. PIPEs are mechanisms for firms to elevate capital from a choose group of traders that make the ultimate market debut doable via their financing.

“I remember years ago when we were talking to investors, some folks didn’t even know where Southeast Asia was on a map,” Grab co-founder and CEO Anthony Tan stated Tuesday on CNBC’s “Squawk Box.”

“So, today as we announce what is expected to be the largest U.S. equity offering in Southeast Asia … it shows validation of the tremendous offering right here in this region, and that the ‘super app’ strategy works.”

Grab, ranked No. 16 on final yr’s CNBC Disruptor 50 record, delivers an array of digital companies corresponding to transportation, meals supply, resort bookings, online banking, cell funds and insurance coverage companies from its app — thus the “super app” title. It operates in most of Southeast Asia, serving greater than 187 million customers in over 350 cities throughout eight international locations.

While SPACs have turn out to be a hot investment vehicle on Wall Street, they’re additionally gaining traction in Asia with six regional-focused SPAC firms which have collectively raised $2.7 billion up to now in 2021.

But in the primary quarter this yr, capital raised by blank-check corporations like Altimeter has already outpaced 2020’s total issuance. It has not solely drawn the attention of the U.S. Securities and Exchange Commission, but in addition traders who’re scared of a market bubble.

Still, new offers proceed to flood the market — greater than 100 in March alone, in accordance to SPAC Research.

“We found this was the better way to IPO,” Tan stated Tuesday of the choice he claims his firm has been weighing during the last yr. “They [Altimeter] committed more than 15% of our PIPE, and that shows real commitment … we’ve been able to secure a world-class, day-one cap table of all investors” concerned with the corporate.

While Grab’s merger stays document setting, Boston-based biotech firm Ginkgo Bioworks, ranked No. 44 on final yr’s CNBC Disruptor 50 record, is alleged to be contemplating an equally huge $20 billion blank-check merger of its personal, according to Bloomberg.

Throughout the pandemic, Southeast Asia saw a surge in using digital companies like e-commerce, meals supply and on-line funds. As many as 40 million folks in six international locations throughout the area — Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand — got here on-line for the primary time in 2020, in accordance to a report from Google, Temasek Holdings and Bain & Company.

Still, Covid-19 has pressured regional non-public market decacorns (start-ups valued at greater than $10 billion) to cut staff and rethink what is going to outline a dominant tremendous app suite of on-demand companies. It has additionally intensified the aggressive panorama in an already-saturated market that has confirmed troublesome to flip a revenue.

After a interval of intense and costly competitors by Uber to dominate trip sharing in many markets, it bought its Southeast Asia enterprise to Grab three years in the past in return for a stake in the corporate.

“Even in the toughest times during Covid, we’ve been able to pivot our driver supply to other jobs,” Tan stated Tuesday. “There’s no one country that makes up more than 35% of our total revenues, so having that resilience and regional diversification has really helped us.”

In January, Reuters reported that Grab’s web income had grown 70% yr over yr, recovering to pre-pandemic ranges with its ride-hailing enterprise breaking even in all working markets, together with its largest, Indonesia.

Grab and Gojek have been reportedly shut to finalizing a merger of their very own late final yr.

Reuters reported that Gojek — which is ranked No. 10 on final yr’s CNBC Disruptor 50 record — is now in superior talks with Indonesian e-commerce chief Tokopedia for an $18 billion merger, forward of a possible twin itemizing in Jakarta and the U.S.

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