Grab Valuation Could Hit $40 Billion If SPAC Talks Solidify

Singapore’s Grab could hit a valuation as high as $40 billion if talks with a special purpose acquisition company (SPAC) solidifies into a deal, The Wall Street Journal reported on Thursday (March 11), citing sources.

If a deal is reached it will break records as the largest SPAC merger so far. The Southeast Asian ride-hailing startup is talking with one of two SPACs associated with Altimeter Capital Management LP, the sources said, per the Journal.

As part of the agreement, Grab would raise between $3 billion and $4 billion in a funding round called PIPE, which is almost standard in a SPAC merger, the sources said. As Grab and Altimeter begin discussions with additional investors, the dollar figures could change, some of the sources said.

A traditional U.S. initial public offering (IPO) could still be a possibility if SPAC talks dissolve. An announcement is expected in the coming weeks. 

SPACs raised in excess of $70 billion this year, a new record. Over 70 percent of all public share sales are a result of blank check mergers, according to Dealogic, per WSJ. WeWork, Shutterfly and SoFi are just a few of the companies going public via SPACs.

Grab was co-founded by Anthony Tan and Tan Hooi Ling in 2011 and initially offered ride-hailing services. It has since grown to provide delivery services to households and digital financial services to merchants.

Some of the startup’s biggest backers include SoftBank, Uber and Toyota. Grab was valued at about $15 billion following a funding round in October 2019, according to PitchBook, per the Journal.

Altimeter, a Silicon Valley venture capital firm, has two SPACs — Altimeter Growth Corp. and Altimeter Growth Corp 2. It manages about $16 billion and mostly puts money into technology firms. Altimeter Growth Corp. raised $450 million in an October 2020 IPO. Altimeter Growth Corp. 2 raised $400 million in a January IPO. 

Grab has been strategizing with J.P. Morgan Chase & Co. and Morgan Stanley to find a SPAC merger deal. There are currently numerous tech unicorns in the Southeast Asian region looking to go public via SPACs.