Southeast Asian tech giant Grab plans to go public in the US with a nearly $40 billion valuation in the largest-ever deal with a blank-check company.
Grab — a self-described “superapp” that offers ride-hailing, food delivery and digital payment services — is the latest startup to capitalize on the craze around special purpose acquisition companies, publicly traded shell firms known as SPACs created to merge with existing businesses that take over their stock listings.
The deal announced Tuesday will see Singapore-based Grab merge with Altimeter Growth Corp., a SPAC backed by Silicon Valley investment firm Altimeter Capital.
Grab will start trading on the Nasdaq under the ticker symbol “GRAB” in the coming months after the companies close the mega-merger, which is expected to result in the US’s biggest-ever equity offering by a Southeast Asian company, according to a news release.
“As we become a publicly-traded company, we’ll work even harder to create economic empowerment for our communities, because when Southeast Asia succeeds, Grab succeeds,” Grab co-founder and CEO Anthony Tan said in a statement.
Altimeter Growth Corp.’s share price surged about 9.9 percent in premarket trading to $15.33 as of 7:21 a.m. Tuesday.
SPACs have already raised $99 billion in the US this year, outpacing the record $83 billion raised in all of 2020. The frenzy has gotten so frothy that the Securities and Exchange Commission has reportedly started probing how underwriters of SPAC deals are managing the risks they involve.
Grab’s move to go public follows a coronavirus-fueled growth spurt for the company serving more than 400 cities in eight countries. Its gross merchandise volume, a sales-related metric, hit about $12.5 billion in 2020, more than doubling from 2018 and outpacing pre-pandemic levels, the company said.
Grab’s deal with Altimeter — which has invested in other startups including StockX and Plaid — values it at $39.6 billion and will give the company a roughly $4.5 billion cash infusion.
That includes more than $4 billion in so-called private investment in public equity funding from investors such as Fidelity International and Temasek, Singapore’s state-owned investment firm, according to the press release.
With Post wires