Post strong performance in 2020, Grab eyes successful US listing, says GlobalData Thematic Research

Singapore-based ride hailing giant Grab has announced a Nasdaq listing via a merger with California-based special-purpose acquisition company (SPAC) Altimeter Growth Corp. The company will be valued at close to $40bn, making it the highest valued SPAC deal to date. E-commerce was the most successful theme among the technology, media and telecom (TMT) initial public offerings (IPOs) between 2018 and 2020, suggesting a positive outlook for the company’s IPO, says GlobalData, a leading data and analytics company.

While the COVID-19 pandemic impacted the TMT IPO market in the first half of 2020, it recovered strongly in the second half. Singapore has largely recovered from the pandemic as its externally oriented economy was boosted by other countries reopening their economies. Other Asian countries such as Malaysia, Indonesia, and Japan, where Grab operates, have also shown the strongest signs of recovery from the pandemic.

Moreover, e-commerce companies have come out of the pandemic in good shape. Grab reported that its net revenue jumped by about 70% year-on-year in 2020, with revenues recovering strongly to above pre-pandemic levels. The company has successfully diversified into fintech and online payments.

GlobalData’s research shows that over the last three years, key themes such as e-commerce, mobile and fintech have been associated with the most successful capital raisings.

Swati Verma, Associate Project Manager of Thematic Research at GlobalData, comments: “Like a lot of other TMT companies, Grab is now poised to merge with a SPAC vehicle for its listing. 2020 saw at least 25 TMT companies combining with SPACs to go public. The advantages of SPAC merger IPO include a less intrusive IPO process with fewer disclosure requirements. Such listings have gained popularity as they emerge as cheaper and faster alternatives to traditional IPOs.”

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