Grab’s total group net revenues have grown approximately 70% year-on-year last year compared to 2019, said president Ming Maa in an email newsletter update, despite a competitive environment. Maa added that its group revenues have returned to “well over 100% of pre-COVID levels” and it has met its growth and profitability targets. At the same time, its monthly earnings before interest, taxes, depreciation, and amortisation (EBITDA) throughout 2020 was reduced by approximately 80% as a result of disciplined spending and being prudent in stewarding its shareholder capital.
The company has bounced back despite facing headwinds early last year, which resulted in Grab cutting its workforce by about 360 individuals, representing 5% of its staff. It also pulled non-core projects, consolidated functions for greater efficiency, and right-sized teams to better match changing business needs. That said, the company also doubled down on delivery verticals and redeployed employees to meet the growing customer demand for deliveries.
According to Maa, the company brought in nearly 600,000 new merchants across Southeast Asia online onto its platform in 2020, more than doubling the number of merchants on Grab. By supporting small businesses, it also nearly tripled food delivery net revenues year-on-year in the third quarter of last year (Q3 2020). As of Q3 2020, its food delivery business brings in over 50% of the revenue and Maa said in the recent update that Grab expects this segment to achieve breakeven by the end of the year, after having recorded positive (EBITDA) in several countries in Q2 2020. Another milestone for Grab last year was the selection of the Grab-Singtel consortium by the Monetary Authority of Singapore to set up a digital full bank in the country. Charles Wong, former Grab senior managing director, currently leads the consortium as CEO.
“I believe that in spite of, or perhaps because of all that the pandemic has thrown at us, we can collectively find new and better ways to push ourselves forward, serve our customers and overcome these challenges together,” Maa said. He added that Grab will continue to take the lead to support them by giving more SMEs the tools and skills to thrive.
The ride-hailing app has been making headlines over the past month over a potential merger with Gojek. In December 2020, Reuters quoted CEO Anthony Tan saying that it is "well placed to make acquisitions". At the same time, Bloomberg reported that Grab and Gojek had reportedly "made substantial progress" to merge. This led the Competition and Consumer Commission of Singapore (CCCS) to reach out to both parties for more information to ensure it is in line with Singapore's competition law. Meanwhile, Nikkei Asia also reported that Grab requested for Tan to be "the de facto CEO for life" of the potential merged entity with Gojek. Grab is also reportedly requesting other clauses as conditions for the merger, including offering Tan "sizable voting power in the company and veto rights over board decisions", Nikkei Asia added.
As news of the potential Grab-Gojek merger heats up, Bloomberg today reported that Gojek is "in advanced discussions" about merger with Indonesian eCommerce player Tokopedia ahead of a planned IPO of the combined entity. Both parties are reportedly eager to seal the deal "as soon as possible in the coming months", Bloomberg said. Earlier this year, Gojek's spokesperson denied talks about a potential merger with Grab, saying that there were "no plans for any sort of merger" and that "media reports regarding discussions of this nature are not accurate". Meanwhile last March, the Indonesian competition and consumer commission Yayasan Lembaga Konsumen Indonesia also reportedly expressed “rejection” of the proposed Gojek-Grab merger. The commission explained that the merger risks violation of consumer rights as there will no longer be more choices for consumers, and it will lead to "unfair business competition".
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