Singapore-headquartered ride-hailing giant Grab began trading on the Nasdaq on Thursday after completing the merger deal with the special-purpose acquisition company (SPAC) Altimeter Growth Corp.
Shares opened at $13.06 apiece under the ticker symbol “GRAB,” following the merger deal that valued the Southeast Asian company at nearly $40 billion.
Instead of a traditional share offering, Grab opted to go public through a shell company to reduce costs. Using SPAC has been an increasingly common technique among start-ups since it allows for greater flexibility in voting rights while also lowering costs.
The unicorn is backed by many well-known investors, including Temasek, SoftBank, Tencent and Didi. Founded in 2012, it has raised a total of $12.5 billion in funding over 34 rounds before going public.
"We truly believe this is Southeast Asia’s time to shine, and we hope that our entrance into the global public market will help bring greater attention to the tremendous opportunity here in the region," said Anthony Tan, Group CEO and Co-founder, Grab.
“Grab is an iconic, mission-driven and founder-led company that makes a difference in the lives of the people and communities it serves. [The company] has demonstrated durable growth even during the pandemic and is playing a foundational role in the digitization of Southeast Asia,” Altimeter Capital founder and CEO Brad Gerstner stated in a press release.
After acquiring Uber's Southeast Asia business in 2018, Grab has expanded into a variety of other services, including food delivery, digital payments, financial services, etc, and evolved into a super app in the region.
Originated in China, Super app, the concept that the daily needs of users can be fulfilled by one app, has become a common strategy adopted by Southeast Asian tech giants for expansion.
At present, Grab's primary competitors in Southeast Asia include GoTO, which was formed by the merging of Indonesian ride-hailing company Gojek and Indonesian e-commerce platform Tokopedia, as well as Singapore's Sea Limited (NASDAQ: SE), whose business covers food delivery, e-commerce, and financial services.
Grab plunged 20% on Thursday, closing at $8.75 per share, and its market capitalization fell to $34.5 billion.