Ride hailing company Grab Holdings will soon be trading on New York's Nasdaq after announcing a nearly $40 billion merger with a publicly listed affiliate of Altimeter Capital, the largest deal of its kind to date.
By merging with an already public shell company, Grab will be able to list without undergoing an IPO in a move that has become increasingly popular on primary markets.
As part of the offering released late Tuesday, the transportation tech startup turned payments and consumer services app will net more than $4 billion in funding from investors including Fidelity International, Blackrock Inc and T. Rowe Price Group Inc, with Altimeter putting in an additional $750 million to give Grab an estimated market value of $39.9 billion.
"This is definitely one of the best internet companies," Altimeter chief executive Brad Gerstner said in an interview with Bloomberg. "The runway ahead is very long and very wide for Grab if they continue to execute."
Grab claimed a roughly 72% share of southeast Asia's ride healing market last year, in addition to half of the region's online food delivery business, and the latest merger will equip the company with ample dry powder to continue expansion.
"This is a milestone in our journey to open up access for everyone to benefit from the digital economy," Grab CEO and co-founder Anthony Tan said in a statement.
Tan and Harvard Business School classmate Hooi Ling Tan founded Grab in 2012 in Kuala Lumpur as MyTeksi, a mobile app allowing users to book cabs, before rebranding under its current name and relocating to Singapore in 2014.
The company most recently expanded into digital payments with GrabPay, an electronic wallet service which was spun off earlier this year into the Grab Financial Group alongside Grab's personal loan, health and automotive insurance services.
Headed by senior managing director Reuben Lai, Grab Financial Group raised more than $300 million in a series A funding round concluded in January.
"As we become a publicly-traded company, we'll work even harder to create economic empowerment for our communities, because when Southeast Asia succeeds, Grab succeeds," Tan said.
While still unprofitable, Grab is poised to take advantage of economic changes taking place across the region and its growth as a business is mirrored by increasing financial inclusion and consumer spending power in countries across Southeast Asia, which is home to the world's largest unbanked population.
The company expects the regional market for its fintech services to more than triple in the next four years to reach $180 billion by 2025.
JPMorgan Chase & Co, Evercore Inc and Morgan Stanley acted as advisors to Grab in the deal.