This week, Toyota came in big, investing US$1 billion into Grab, allegedly valuing Grab at more than US$10 billion.

“Early investors much have made a lot of money,” says the chatter in many of the Whatsapp and WeChat groups.

Well, probably yes for early investors, but for PE investors who began betting big on the ride-hailing firm in second half of 2015, the paper returns are yet to be ‘huge’.

Astronomical return is yet to come

Let’s do some maths.

To date, Grab has raised US$5.1 billion according to what has been successively announced in the public domain. Of course, the announced financing includes debt, and some of the PE investments have not been announced.

But let’s just assume US$5.1 billion is equity investment. Collectively the return will be about 100% – with the later investors accounting for less.

Do not forget that Uber now owns 27.5% of Grab, with no cash injection.


That said, Grab has reached an inflection point – there is no major competition in most of the markets in Southeast Asia, a chance for it to truly demonstrate (and increase) its value.

Profitability is not difficult – when you are dominating the market. Easy Taxi became profitable in Peru in 2015, where it occupied between 85%-90% of the market share. Many users, especially in Singapore, are complaining about Grab’s ‘surging’ prices.

Who would not test the profitability limit in this time window of no competition? This is a perfectly rational business decision. The good thing about ride-hailing is that you can always reverse the excesses if they do not work – all you need to do is offering vouchers and users will forgive you.

The real potential

In addition to profitability, this is also a good time for Grab to start focusing on building value, including GrabPay, insurance and maybe eventually driverless cars, leveraging the excellent use case of ride-hailing.

If any of the above becomes successful, Grab’s value will be far more than US$10 billion.

While this is a big ‘if’ from execution point of view, Grab is in a much better position than any of existing or potential rivals to realise this.



Read some of our earlier blog posts about Grab, and ride-hailing in general:
Gojek’s aggressive expansion plans – Grab’s new nightmare?
Grab’s monopoly – first signs of trouble
Grab finally buys Uber, as predicted. What next?
If Grab becomes the biggest player in SEA, what to expect?
Go-Jek gets bumper new funding round (while Grab plans their H1 in Indonesia)
GrabPay is not making full use of its advantages
Will Grab & Uber merge, with Softbank now a shareholder of both?
Meituan vs. Didi: China’s ride-hailing war II
A US$30b company is challenging Didi in China
Didi is far from winning the war in China
The real story behind the Didi-Uber merger in China

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at


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He has worn many hats in the past - selling advertising space, banking services, and even trading stocks. In 2013, longing for a change of scenery, he joined Rocket Internet’s (now Alibaba’s) Lazada as a online marketer in Bangkok, where he experienced first hand life in a startup. He never looked back since - landing lead roles at Rocket’s EasyTaxi (Singapore), Rocket’s MEIG (Dubai), and Bamilo (Tehran). After that, he launched (and ran) the Thai venture for one of Singapore’s biggest cross-border ecommerce. Last year, Chong put his expertise to work, helping an SGX-listed company relocate to and run operations in Thailand. Nowadays, he’s just chilling by the countryside.