Anthony Tan Drives Regional Superapp Grab Ahead With Fintech, Other Moves

Grab group CEO and cofounder Anthony Tan is taking the superapp company to its next stage, including a planned transformation into a public company and growing its presence in fintech.

When the pandemic struck last year, superapp giant Grab’s ride-hailing business took a hit in Southeast Asia amid lockdowns and restrictions. “The first thing we thought about was how do we make sure that our driver partners could quickly pivot and that their incomes were at least supported in some shape or form,” says Grab group CEO and cofounder Anthony Tan in an exclusive interview with Forbes Asia, by video call. The solution? “Stop thinking it’s business as usual,” says Tan, 39. 

Tan says Grab asked its drivers to transport meals as well as people as pandemic-induced demand for food delivery spiked in the region (and worldwide). “We converted over 140,000 drivers in a very short period of time,” says Tan, including around 18,000 drivers in Malaysia in a single day. Tan credits this flexibility to Grab’s superapp strategy—customers only need one app if they want to order pizzas instead of rides. As Grab says about itself: “We’re an all-in-one platform.”

“Whether you are in ride-hailing, e-commerce delivery, GrabFood, GrabMart, it was literally a tab, you just switch on the tab [inside the app],” Tan says. “Grab’s business became actually even more resilient because we are the only player across the region that has this multi-vertical ability.” 

Now Grab Holdings, with its main headquarters in Singapore, is poised for another transition in its journey from when Tan and his cofounder Tan Hooi Ling (no relation) launched the MyTeksi app in 2012 in his native Malaysia. Grab is expected to go public on Nasdaq via a merger with a SPAC sponsored by Altimeter Growth by year-end. If all goes according to plan, it will be the world’s largest SPAC deal, raising $4.5 billion and giving Grab a post-money equity value of $40 billion, according to public filings. Altimeter did not respond to requests for comment. Grab declined to comment on the SPAC deal.

Another group with a keen interest in Grab’s future are the investors who have pumped more than $12 billion into the company before the SPAC merger, including A-list backers such as GGV Capital, SoftBank and Toyota.

Tan feels that Grab’s journey is only just beginning. Looking ahead, he says Southeast Asia is under penetrated for Grab’s services compared to more mature markets such as China and the U.S. Grab has three main businesses: mobility, deliveries and financial services, which contributed to its $12.5 billion in total gross merchandise value (GMV) last year. The region’s total addressable market for food delivery, ride-hailing, digital wallet payments and digital financial services is expected to grow at least threefold from 2020 to over $180 billion GMV by 2025, according to research firm Euromonitor. “I’m really excited about the future,” says Tan. Grab CFO Peter Oey agrees: “In the countries we operate in today, we’re just scratching the surface.” 

Citing Euromonitor data, Grab claims to be the market leader in GMV or total payment volume (TPV) in all its key businesses in Southeast Asia, where it operates in eight countries. Yet it still faces tough competitors. The first among them is GoTo, the Indonesia-based superapp company that was formed in May by a merger of superapp company Gojek with the Indonesian e-commerce company Tokopedia. Although GoTo also operates in Singapore and Vietnam through Gojek, it’s most entrenched in its home market.

With a trillion-dollar economy and close to 300 million people, Indonesia is crucial to Grab’s regional ambitions as its largest market in Southeast Asia—and it’s the only country in Grab’s ecosystem with its own dedicated country president and country managing director. To further cement its position there, Grab in July formed a strategic alliance with Indonesian tech and media company Elang Mahkota Teknologi (Emtek), which invested $375 million in Grab’s Indonesian unit. Last year, Grab officially opened a tech research center in Jakarta, dubbed the company’s second headquarters. 

One rival, Uber, took a if-you-can’t-beat-them-join-them approach. In 2018, Grab acquired Uber’s operations in Southeast Asia, while Uber got a 27.5% stake in the company (Uber will hold 14.3% after the SPAC deal). Uber CEO Dara Khosrowshahi also joined Grab’s board. China’s ride-hailing giant Didi also invested in Grab, starting in 2015, and is slated to own 7.5% when the SPAC deal goes through. 

Besides its superapp rivals, Grab faces competitors in each of its businesses, such as Delivery Hero’s Foodpanda in food delivery. The biggest is Singapore-based Sea Ltd., now the most valuable tech company in Southeast Asia (worth $188 billion in late October). Although Sea has entered food delivery, the main battleground between them is fintech. Late last year, Grab, in partnership with Singapore’s dominant telco Singtel, was chosen to receive one of two digital full bank licenses in Singapore—while Sea was the other selected. “Grab has identified financial services as the third pillar that they are going into. So that is a segment that we expect them to invest in growing whether through organic means or through M&A,” says Moody’s Investor Service analyst Stephanie Cheong, based in Singapore. Grab says its Singapore digibank is expected to roll out in the second quarter of next year.

“Millions of consumers, when thinking about GrabPay, they think I can pay now, I can pay later, I can pay anywhere.”

Grab’s foray into financial services started in 2017 with the launch of the digital payments service GrabPay. Today a unit called Grab Financial Group offers a growing list of offerings such as insurance, loans, wealth management and buy now, pay later plans. In 2019, Grab launched a GrabPay card in partnership with Mastercard, which could be used both online and offline. To drive growth, the company taps its built-in customer base of drivers, consumers and merchants in its ecosystem to which it can market these services. To date, Grab says it has acquired a suite of financial services licenses, including payments licenses in six regional markets. “Millions of consumers, when thinking about GrabPay, they think I can pay now, I can pay later, I can pay anywhere. That gives you top of mind,” says Tan. 

Aside from Singapore, Tan is also bulking up Grab in Indonesia’s fintech sector. In October, Grab raised its stake in Indonesian fintech Ovo, and now owns 80%. Tan says Grab wants to make financial services more affordable and accessible in the region. “In Southeast Asia, six out of 10 people are either under-banked or unbanked, so we have to make sure that this group of people are covered,” he says.  

Grab’s entry into fintech was pushed in 2015 by Jixun Foo, a global managing partner of VC firm GGV Capital, an early investor in Grab. “Every time I went to a board meeting, I looked at their numbers and looked at where they were, I would emphasize—not quite pound the table—but emphasized the importance of the e-wallet,” says Foo. In 2017, Grab launched GrabPay and acquired Kudo, one of Indonesia’s leading online-to-offline e-commerce firms. 

The importance of digital payments is more than adding a tab in the app—it’s a powerful tool providing critical insights into users’ entire spectrum of spending habits, budgets and interests. “You understand the consumer [and] you understand their spending,” says Foo. “An e-wallet has got huge strategic long-term value.” The superapp wallet is the key to the success of the superapp, Foo said in a recent commentary posted online.

The coming competition could be fierce—and critical—for Grab. “How will Grab create a new generation of banking products and services to challenge incumbents and other superapp providers such as GoTo? This is going to be very important for them—to demonstrate why they’re different, and not just another distribution platform of existing products and services,” says Christophe Uzureau, Gartner vice president in financial services, based in Hong Kong. 

Another emerging opportunity pursued by Grab and Sea is advertising. In a recent earnings call with analysts, Sea group CEO Forrest Li noted that recent GAAP revenue growth had been driven primarily by its merchants investing in marketing and advertising. In 2018, Grab created a unit called GrabAds, which in September announced a year-long partnership with GroupM, a subsidiary of advertising giant WPP. The advertising business is under Grab’s enterprises and new initiatives vertical. While small at $34 million GMV for the quarter ended in June, this vertical grew over sixfold from last year’s quarter—a sign that advertising could potentially grow to become a significant business for Grab. 

Grab in September reported its net loss for the three months ended in June widened to $815 million from $718 million a year ago (Grab notes much of this recent loss was due to interest expenses). It also trimmed its full-year projections for adjusted net sales to a range of $2.1 billion to $2.2 billion from an earlier forecast of $2.3 billion, as the region continues to grapple with the pandemic. Total GMV for the period is expected to be in a range of $15 billion to $15.5 billion, down from $16.7 billion in a previous forecast. Those losses were mitigated by the growth in deliveries, which nearly doubled to $5.5 billion GMV in 2020 from $2.9 billion a year earlier, overtaking mobility for the first time. Financial services also have grown steadily through the pandemic to $8.9 billion last year from $7.8 billion in 2019 in TPV. 

Tan is hoping for mobility to soon return to pre-Covid-19 levels. For financial services, “we actually expect to see even more growth,” says Tan. As he continues to build the superapp, any losses for now can be cushioned by Grab’s cash liquidity of around $5.3 billion. To help it become profitable, Tan notes that Grab’s superapp model yields synergies. In 2018, only 33% of customers used more than one Grab service, but that figure jumped to 55% by June. “You can cross sell additional services because our monthly transacting users are loyal and remain with us,” he says. “So we are seeing basket sizes tend to be double digit percentages higher than other companies. And I think that’s also a leading indication that people trust us. There’s more trust, there’s more loyalty, while increasing the size of the basket.” 

To be sure, there are other challenges, including a shifting regulatory maze and a myriad of local particularities in each market across the region. “When we were first recruiting drivers, we realized so many of them didn’t even own a smartphone. They couldn’t afford it,” says Tan, who adds that Grab then struck a deal with Samsung for a bulk purchase of phones for their drivers. “We would sit with them and teach them how to use it.” 

As Grab grows, its management has been beefed up with new talent.

Grab faced a major crisis in 2014, when the app had a regional outage across its systems in Malaysia, Philippines, Singapore and Thailand. “Our systems weren’t built to handle the sudden surge in bookings we were experiencing, and as a result, we had a lot of very angry driver-partners and users,” he says. “I really thought that was it for the company because who would ever trust us again?”

Tan went into crisis management mode, camping overnight in the Kuala Lumpur office with Grab’s engineering team while they worked around the clock to fix the problem. “I wasn’t an engineer, so I couldn’t do anything to help fix the problem. All I could do was stay with the team, try to understand what was happening, give them moral support and most importantly, keep them fed. No GrabFood back then. So I was their pizza delivery guy,” says Tan. “Thankfully, we managed to pull through that episode.” The booking engine was fixed and then rewritten to be more scalable. 

As Grab grows, its management has been beefed up with new talent. In early October, Grab said that cofounder Tan Hooi Ling was stepping away from her chief operating officer role in January, but will continue to oversee human resources, corporate strategy and technology. (Tan Hooi Ling was unavailable to comment.) The new COO will be Alex Hungate, current CEO of SATS, a Singapore-listed in-flight catering and ground handling firm, and former CEO of HSBC Singapore. Back in 2019, Neneng Goenadi, an Accenture veteran in Indonesia, was brought on board as the Indonesia managing director to work with Grab Indonesia president Ridzki Kramadibrata. The new talent adds to a strong team that includes Ming Maa, who has been Grab’s president since 2016. Maa has over a dozen years of senior roles in tech and finance, including at Goldman Sachs and SoftBank, where he helped oversee two rounds of investment into Grab. 

“The fact that most of them are still staying with him [Tan] says a lot about his style and his leadership,” notes Chua Joo Hock, managing partner for Southeast Asia and India at Temasek-owned Vertex Ventures, which was a former early investor in Grab. “He’s a very driven person. Once he has his mind set on something, he will get the right people to implement it, execute it. And he follows up to ensure that things are done properly.” 

Tan’s entrepreneurial drive is supplemented by a special sense of mission. Tan says: “People tease me about it, but I really do believe that God put me here to run Grab and to serve millions of people.”  

CAR GUY

Tan grew up around cars. His late grandfather Tan Yuet Foh was a taxi driver in Malaysia who cofounded with family members what became Tan Chong Motor in 1957, which had snagged the right to import and sell Nissan cars in the country. Eventually Nissan (then called Datsun) became one of the most popular brands in the country, making the Tan family wealthy. Anthony is the son of Tan Heng Chew, Tan Chong’s president. His father expected him to someday join the business, and to improve his business skills, Tan went to Harvard Business School to get an M.B.A. in 2009.

While there, he met McKinsey consultant Tan Hooi Ling, and the two wrote a business plan for a taxi-hailing app that won second prize in the school’s New Venture Competition in 2011. Using the $25,000 in prize money and personal funds, the two decamped to Malaysia and launched the MyTeksi app there in 2012. The next year MyTeksi was rebranded as GrabTaxi, and then Grab in 2016. One big supporter of Tan’s entrepreneurial shift was his mother. “She was one of Grab’s first investors and I’ve continued to value her wisdom over the years,” Tan says. Based on his Grab stake, Tan now has a net worth of $790 million and ranked No. 47 on this year’s Singapore’s 50 Richest list.