Grab CEO says the company can go public ‘once we’re profitable’
A pedestrian walks past a signage for Grab in Singapore on April 26, 2018.
Paul Miller | Bloomberg | Getty Images
Southeast Asia’s ride-hailing company Grab could go public when its entire business is profitable, its CEO said on Thursday, adding that more markets could move out of the red in the next 12 months.
“Once we’re profitable, then we can clearly go to public when we want to,” Grab’s co-founder and chief executive officer, Anthony Tan, told CNBC’s Deirdre Bosa.
On the company’s overall profitability, Tan said that Grab’s operations in some markets are already making money this year.
“We continue to see more markets getting … more profitable in many other cities, across the next 12 months,” he added. The Singapore-based Grab operates in eight Southeast Asian countries, including Vietnam, Indonesia, and Thailand.
Grab was valued at $14 billion in March this year. Last year, it bought out the Southeast Asia business of its major competitor, Uber. The U.S. tech giant holds a 23.2% stake, or 409 million shares, in Grab as of December 31, 2018.
Uber’s IPO prospectus, released earlier this year, shed some light on Grab’s road to potentially going public.
If Grab doesn’t go public by March 25, 2023, Uber has the option to exercise a redemption right to “put all or a portion of its investment back to Grab any time after the redemption date … for cash,” according to the prospectus. That means Grab may end up paying north of $2.2 billion if Uber exercises that option.
A redemption right lets investors make the company repurchase their shares after a certain period of time.
For its part, Grab has raised more than $9 billion, according to data from Crunchbase. It also counts Japanese conglomerate SoftBank and Chinese ride-hailing giant Didi Chuxing as investors.
Grab’s path to profitability could start with its food delivery service, a senior executive told CNBC in September, adding that its growing food delivery business could drive profitability in the long run.
In November, Singapore banned e-scooters on footpaths in Singapore. E-scooters are used by more than one in three GrabFood riders who deliver orders, and it is still unclear what impact the ban will have on Grab.
For now, the firm will focus on delivering customer value and sustainability before considering an initial public offering, Tan said. They’ll be doing that by working with governments and running social impact programs, like Grab For Good, to invest for the long term.
When asked whether the company was “ready” to tap public markets, Tan remained vague.
“It’s always one of the options, but we will have to keep working with our (strategic partners),” he said.