So How Much Is Grab Taxi Worth?

So How Much Is Grab Taxi Worth?

By Assaf Gilad and Leah Meirovich

While Uber fiercely fought Didi in China and Ola in India, Singapore-based Grab excelled in taking over the entire southeast Asian territory. Despite some Uber presence in the region, Grab, that offers motorbike taxis on demand and access to licensed taxis and limousines, grabbed Singapore, Indonesia, Malaysia, The Philippines, Thailand and Vietnam. It is active now in 34 cities all across the region, claims over 24 million app downloads and more than 500,000 drivers.

Grab’s Total Employee Count (Data: LinkedIn)

But Uber still has plans for Southeast Asia. After the merger with Didi, the ride-hailing behemoth has now much more time and money to invest in the region. Uber has also acquired three other companies during its growth process and has strong operations and user base within the South Asian market.

After Uber finished its business in China, it must show to the world its strength in the rest of Asia. Per The Information, the competition with Uber is about to get tighter. Didi, a potential buyer, said it isn’t interested in extending into southeast Asia.  Uber, on the other side is funded heavily after gaining extra $1 billion from Didi’s merger deal, and is more advanced in its technology. Services such as Uberpool or the autonomous vehicle presented at San Francisco bu Uber is something Grab can only dream about at this stage. According to the news site, Grab’s revenues are estimated at $80-$95 million per year, with a $100 million net loss. The good news is that burn rate has fallen to around $10 million a month. Uber is generating in the region 10%-20% less than Grab, but it’s gaining ground on Grab. Uber subsidizes heavily new drivers and riders. It has also partnered with banks to give car and motorbike loans to drivers that are loyal to Grab and are performing well.

Go-Jek is another rival worth paying attention to. Go-Jek has already made one acquisition and had raised $550 million before being acquired by MVCommerce in October 2016, but as for today, it didn’t expand beyond Indonesia. Indonesia is today’s largest and highest growing economy in Southeast Asia and is also world’s fifth most populated country.

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Lyft, (operating in the US), Ola (operating in India), and Didi Chuxing (operating in China) would be typically considered competition, but the three have formed a partnership with Grab which allows each to provide their users with only one app yet access the partner services when traveling to those specific countries, as what is informally known as the ‘anti-Uber coalition’. However, Uber’s merger with Didi has called into question their loyalty to the anti-Uber partnership. If Didi draws back from the partnership now that it has a stake in Uber, it could weigh very heavily on Grab, which is still facing very heavy competition from Uber in their market.

In addition to Lyft and Didi, Grab has created partnerships with the self-driving car nuTonomy, and Tokyo Century, a Japanese leasing company. Also, in December 2016, Honda Motor Company forged a partnership with Grab and stated that it would be investing in Grab. The two companies will still have to figure out the nature of their co-operation, but it seems that they both want Grab to manage a fleet of Honda’s motorbikes in the future.

Two key people have recently joined Grab and are effective in its strategy: CTO Wei Zhu, who was previously a chief Facebook Engineer and the creator of Facebook Connect, and president Ming Maa, a former Softbank executive that is taking over the financial management of Grab and could take it to an IPO in the future.

Zirra, a company that has developed AI and machine learning technology to effectively analyze the private tech market, has also produced interesting data on Grab. According to the valuation process, based on 85 different data sources, Zirra estimated Grab’s current valuation at about $4.1-$4.2 billion. [Click here for the full spotlight report on Grab], higher than the valuation published by the media when reporting in the recent financial round made by Softbank and Honda in September 2016.

Zirra estimates that within a period of 2-3 years, Grab could go public or be sold for $6.3-$6.4 billion. It is far away from the $68 billion Uber’s valuation (only $52 billion, according to Zirra’s algorithms), but it still keeps Grab inside the prestigious club of the top 5 private tech automotive companies in the world.

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