Grab Holdings Ltd. expects slower growth of 45% to 55% in 2023 as the Southeast Asian internet giant adjusts to a market downturn and speeds up efforts to reverse years of losses.
Chief Executive Officer Anthony Tan kicked off the company’s first investor day by trying to reassure shareholders Grab was on the rebound. The company backed by SoftBank Group Corp., which posted revenue growth of 79% last quarter, should break even in the second half of 2024 on an adjusted earnings basis before interest, taxes, depreciation and amortization. That excludes once-offs such as writedowns and exceptional items.
“Looking ahead, we’re firing on all cylinders to improve our profitability trajectory,” Tan said at the company’s event in the city-state on Tuesday. “Grab is trying to achieve this by growing our top line in a sustainable manner.”
Grab, long considered one of the rising stars of Southeast Asia, has struggled since it went public through a merger with a special purpose acquisition company in December. Shares have tumbled more than 70% as the company wracked up losses and the stock market soured on unprofitable tech ventures.
Grab, which counts Japan’s SoftBank and Uber Technologies Inc. as two biggest shareholders, went public by merging with Altimeter Capital Management’s SPAC in what was originally a US$40 billion ($57.42 billion) deal. Grab’s market capitalization has declined to US$10.8 billion as of the most recent close.
The company started out focused on the ride-hailing business and competed effectively against Uber. The US company ended up selling Grab its business in Southeast Asia in return for a stake in its Singaporean rival. Grab then launched an ambitious -- and expensive -- campaign to expand into adjacent businesses, including food delivery and finance. It also added everything from hotel bookings and health services to gifts and entertainment experiences to its app.
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Tan’s vision of creating a so-called superapp for Southeast Asia was aggressive, but led to extensive losses. Grab lost US$3.4 billion in 2021 and has piled up almost US$1 billion of losses in the first two quarters of this year.
Chief Operating Officer Alex Hungate said Grab will now have a more defined strategy, outlining an effort to make the company “Southeast Asia’s largest and most efficient on-demand platform that enables local commerce and mobility.”
“This is not just a bunch of words on a page,” Hungate said. “This defines our strategy in a more focused way than we’ve ever defined before.”
