The biggest Wall Street debut so far this year comes from Southeast Asia’s Uber-esq ride-sharing app, Grab.
The Singapore-based startup announced a merger with SPAC Altimeter Capital in a deal that will value the company at $39.6 billion.
The last privately backed company was valued at $16 billion, less than half of Grab’s estimated valuation.
Grab is raising more than $4 billion from investors including Fidelity, BlackRock, T. Rowe Price, Mubadala, and Temasek. The largest US investor is Altimeter Capital with a $750 million investment.
Grab will trade on the NASDAQ under the ticker symbol “GRAB.”
SPACs were once scoffed at on Wall Street, but have taken off over the last year. More than 310 have been launched in 2021, already beating 2020’s record of 257.
Grab joins other SPAC-backed companies including DraftKings, Nikola, and Playboy in the route to going public.
SPACs have attracted billionaires and celebrities looking to get in on the action. Richard Branson and Peter Thiel are familiar names in SPACs, as well as athletes such as Alex Rodriguez, Colin Kaepernick, and Shaquille O’Neal.
SPACs have recently come under heavy scrutiny from the Securities and Exchange Commission. The agency is warning that retail investors should be cautious about getting into SPACs just because a familiar celebrity name is attached.
When asked why Grab chose to go public in the US, rather than in Southeast Asia, co-founder Tan Hooi Ling said the company wanted to reach for a larger investor base.
“For us, the US listing is important because it gives us access to the widest global base of liquidity,” she told CNN Business in an interview Tuesday.
“At the same time, we’re still exploring alternatives on whether we can do a concurrent listing locally as well, and those are still existing conversations that we’re exploring.”
The company was founded by Tan Hooi Ling and Anthony Tan in 2012 and quickly became Southeast Asia’s most valuable private company.
Grab acquired Uber’s Southeast Asia business in 2018 and has since expanded its services into food delivery, digital payments, and financial services.
Grab is a self-described “super-app” that allows users to book rides, purchase insurance, and acquire loans.
It currently has over 25 million active monthly users.
Altimeter Capital CEO Brad Gerstner says the company is a combination of “Uber plus DoorDash plus Ant Financial, all in a single app.”