TP Insight: A Look at Our Lifecycle Investment in Grab
Third Point Ventures May 6, 2021
What started as a Southeast Asian taxi-hailing app has grown into a booming mobility-finance-and-food business. Daniel S. Loeb recounts Third Point Ventures’ involvement in Grab from startup to SPAC to de-SPAC.
Grab was founded in 2012 by Anthony Tan and Hooi Ling Tan, students at Harvard Business School who wanted to make taxi rides in Malaysia safer. When Grab Taxi was expanded and rebranded as “Grab” in 2016, the company decided to raise capital to fund an ambitious plan to rapidly grow its new businesses across Southeast Asia. The Third Points partnership was born during that Series F.
Grab has built a remarkable business in mobility (taxi, rideshare, bikes, scooters), finance (including payments and lending), and food (including delivery, groceries, shopping, and ghost kitchens). The company has been well-managed and efficiently operated as it has steadily grown, even in the face of the Covid-19 pandemic.
“For 2020, the company reported $12.5 billion in GMV, 214 million downloads (10x since we invested in 2016), and the creation of Singapore’s first digital bank.”
Grab has a proven track record of successful execution. We think much of this is due to Anthony and Hooi Ling's leadership and the high-performing culture they have created. Every employee is able to recite the 4 H’s: Heart, Hunger, Honor, and Humility.
Southeast Asia still has very low digital penetration, but the opportunity in financial services is enormous, especially in lending, insurance, and investment management. Through its businesses, Grab has superior data on merchants, drivers, and consumers, which it can use to derive a sustainable underwriting advantage layered on top of a customer acquisition cost advantage through cross-selling.
Third Point’s investment in Grab is an excellent example of our ability to “lifecycle invest” by being a thought and financial partner from growth capital stages to IPO. We owned Grab shares as a venture capital position, were owners of both shares and warrants in the Altimeter SPAC (the organization that sponsored the announced transaction) and are committed to participating in the PIPE transaction for its ultimate de-SPAC later this year. Five years after our first meeting with Grab, we are more excited about the company than ever.