The Grab SPAC with Jon Russell & Nadine Freischlad

Carol Yin -

Fresh out of the studio, Jon Russell & Nadine Fresischlad from The Ken joined us to discuss the 40 billion Grab SPAC (and largest in the world till date) and its impact to the entire Southeast startup ecosystem. Kicking off the conversation, Jon and Nadine analysed why Grab decided to take the SPAC route, summarize the key takeaways from the current businesses to where future growth engines will come from. They discuss what it means for Uber, the investors, the employees, the startup and venture capital ecosystems across Southeast Asia. Last but not least, they examine what it means for their rivals competing in the Indonesia market: Goto and Sea Group.

Here are the interesting show notes and links to the discussion:

  • Nadine Freischlad, Writer, The Ken (@nfreischlad, LinkedIn, The Ken Profile, newsletter) and Jon Russell, Editor, Southeast Asia, The Ken (@jonrussell, LinkedIn, Newsletter, Personal Site, The Ken Profile)
  • Since our last conversation, what have you both been up to?
  • Grab SPAC and its impact to Southeast Asia
  • References: 1/ The ripple effects of Grab’s US$40 bn record SPAC listing by Jon and Nadine in the Ken; 2/ Grab’s Nasdaq debut to test its US$40 billion valuation, set roadmap for Spac hopefuls by Straits Times, 3/ Singapore’s Grab to List in U.S. in $40 Billion SPAC Deal by Yoolim Lee, Bloomberg, 4/ Gojek co-CEO to head app giant GoTo after merger with Tokopedia via Business Times Singapore and 5/ Grab’s IPO Explained: Would I invest in this SPAC (Altimeter Growth Corp)? via Financial Horse.
  • Before we start with Grab’s $40B valuation SPAC, let’s talk about what we know from before, we know that from Uber’s S-1 form a few years back that Grab has to go public by 2023 with Uber in the US taking a 27% stake in the company, so going public for Grab has been on their roadmap and our radar for a while now.
  • Let’s first help the audience to set the scene: 1/ What is a SPAC and how does it differ from a traditional initial public offering (IPO)? 2/ Which US entity SPAC is Grab merging with and who are their backers or sponsors? 3/ What are some potential problems for the company by merge with the SPAC?
  • Grab and Altimeter have released a selection of documents that reveals the state of their various businesses (mobility, food delivery and financial services). What are the most interesting findings for both of you?
  • Across the different business lines, where will the growth engines come from given the low margins for the mobility business and subsidies to keep the drivers on the Grab network?
  • Let’s examine the impact, starting with Uber, what are the upsides via the Grab SPAC?
  • Who are the investors from Grab’s earlier round other than Uber that will stand to gain?
  • What is the impact of Grab’s SPAC merger towards the Southeast Asia region as a whole, specifically to the startup and VC ecosystem? How does it align with the other interesting news in the region, for example, SEA Limited, the singaporean company public in the US having theirmarket capitalization going above US$100B and the upcoming Gojek and Tokopedia merger to Goto?
  • Grab’s key war will be in Indonesia, and Gojek’s merger with Tokopedia to Goto is likely to happen within the year, what does that mean for the competition in the Indonesian market?
  • Can Grab take on Goto or will they still need to bleed to win market share?
  • One of the key takeaways is that Anthony Tan, one of the Grab co-founders, has 2% stake in Grab but holds 60% of the voting shares on the board, what does that mean for the shareholders and the employees over all?
  • Where do you see Grab’s future lies beyond the SPAC?
  • Closing
  • Can you both recommend a book, podcast and something which has recently inspired your life?
  • Jon: The news media on Southeast Asia within the past few years.
  • Nadine: Esther Perel , “How’s Work” podcast
  • How can my audience find both of you?

Podcast Information:

The show is hosted and produced by Carol Yin (@CarolYujiaYin) and originally created by Bernard Leong (@bernardleong, Linkedin). Sound credits for the intro music: Taro Iwashiro, “The Beginning” from Red Cliff Soundtrack.