Society benefits the most when entrepreneurs focus on solving problems before monetizing the solution. But solving a problem doesn’t equate to creating a great business.
GRAB has unlocked tremendous consumer value in ride-hail, but their decade-long slog in the most difficult sector in consumer interment has them squeezing out just 6 dimes of revenue out of each ride (Optimistically less 2 dimes of mature profit). So how do you navigate turning an objectively terrible business characterized by fickle customers and razor thin margins into sustainable earnings power? You have to parlay your competitive position in one of your businesses in hopes of achieving meaningful profits in another.
Or in Grab’s case, “positive revenues.” No, that’s not a misprint. Until 2019, Grab paid out more in incentives for ride-hail than they generated (food delivery reached positive revenues in 2H20). Adding food delivery and payments helped build a captive consumer base which was ingeniously turned into the foundation of a “Superapp.” The high frequency business drives traffic to the app and the essential services keep churn low. However, profits are still small, which means monetization needs to be driven by cross-selling.
This Superapp concept is by no means exclusive to Grab – their regional competitor GoJek has been a leader here too. But with a population of 700mn+, perhaps the SEA region could be shared… While customer promiscuity between the two is common (~60% according to our survey), competition is settling and incentives could be cut. Maybe leaning on advertising services, especially with sponsored food listings, and offering a suite of financial services to their 25mn monthly users could bring meaningful earnings…
But a new player, Sea Limited, has been very disruptive.
They recently entered the food delivery market with ShopeeFood, dashing Grab+GoJek hopes of being a profitable duopoly. They’re also putting pressure on the payments businesses. Sea isn’t just attacking Grab’s verticals, they’re attacking their entire ecosystem.
But Grab has a leading market share in almost all of their markets and a very savvy management team that has a history of outcompeting numerous competitors, including $UBER when it was at the height of its powers.
So how will this unfold? What is Grab’s competitive position? What does success look like? What can earnings power look like longer term? Will they be able to build a superapp atop their foundation of ride-hail, food delivery, and payments?
Whether you’re interested in the stock or not, Grab has a fascinating business story that has a lot to teach. It holds lessons for operating at low margins, expanding geographically, building a Superapp foundation, and more.
Subscribe now to learn about all this and more in our 15,000 word deep dive, which includes a survey of >100 Indonesian consumers and discussions with regional venture capitalists and industry executives.

- Background History.
- The Business.
- Deliveries.
- Mobility.
- Financial Services.
- Enterprise and New Initiatives.
- Superapp Strategy.
- Accounting.
- Deliveries.
- Mobility.
- Financial Services.
- Enterprise and New Initiatives.
- Build and Valuation.
- GrabFood Delivery Valuation.
- Grab Mobility Valuation.
- Grab Financial Services Valuation.
- Combined Valuation.
- Call Options.
- Risks.
- Summary Model.
- Conclusion.
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