Once South-East Asia’s most valuable startup, Grab falls US$13bil behind GoTo


Grab and GoTo have been locked in an expensive battle for dominance over the past several years. Grab still counts the city-state of Singapore as its largest market even as it tries to expand in countries including Indonesia, South-East Asia’s largest economy. — AFP

Singapore’s Grab Holdings Ltd, once South-East Asia’s most valuable startup, is faltering behind GoTo Group in the public markets as it fights to gain ground on its Indonesian ride-hailing rival’s home turf.

The unprofitable companies are both struggling to convince investors of their moneymaking potential after staging their stock-market debuts in recent months. Yet GoTo has fallen less than its competitor and its market value of about US$26bil (RM116.67bil) is now twice that of its Singaporean peer. The companies are each set to report quarterly earnings in the coming days.

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Grab and GoTo have been locked in an expensive battle for dominance over the past several years. Grab still counts the city-state of Singapore as its largest market even as it tries to expand in countries including Indonesia, South-East Asia’s largest economy. GoTo is enjoying a leadership position in its home nation of more than 270 million people whose mobile-savvy consumers are shopping on its online-retail platform Tokopedia and ordering rides and food via its Gojek’s app.

The growth potential of Indonesia has helped GoTo outperform Grab, which became a publicly traded company through a merger with Brad Gerstner’s Altimeter Growth Corp in December. GoTo has lost about 3% since its initial public offering in Jakarta in April, while Grab is down more than 60% since combining with the US blank-check company.

ALSO READ: Report: Malaysians gave over RM50mil in tips on Grab in 2021

“GoTo’s advantage as a homegrown Indonesian brand and its synergy with Tokopedia may let the country’s biggest tech firm defend food-delivery market share from Grab, the category’s leader in South-East Asia, and improve profitability,” Nathan Naidu, an analyst at Bloomberg Intelligence, said in a July 20 report.

While Gojek has a strong grasp of the crucial Indonesia market, Grab has made inroads in food delivery. Grab had 49% of the Indonesian food delivery market last year, compared with GoTo’s 43%, according to Momentum Works.

Grab is scheduled to report second-quarter results before US markets open on Aug 25, while GoTo is set to release results on Aug 30. – Bloomberg

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