Two days after Sea Group, another Southeast Asia’s major tech platform, Grab, has just released its own Q1 2023 results on 18 May. Overall the company made good continuous progress towards profitability, however the reduction of deliveries GMV YoY raised some concerns. Grab’s share price dropped by 14.75% during the 1st full trading day after the release. 


Anyway, as usual here are some of our thoughts about the current set of financials. You are welcome to make reference to Momentum Academy’s updated Apples to Apples 2.0: benchmarking major tech platforms report. The report will help you understand the metrics reported, and how they compare to those of Grab’s peers:


  1. Grab mentioned in their previous earnings report (Q4 and FY 2022) that the company was “executing relentlessly to improve profitability”. That continued into Q1 2023 – loss for the quarter reduced from $390m to $250m QoQ.
  2. The company continues to cut the incentives – 5% QoQ or 30% YoY to $390.8m for Q1 2023. We covered the logic of incentives extensively in Apples to Apples 2.0 report, as treatment of incentives impacts revenue recognition of tech platforms like Grab and Gojek quite significantly.

  3. Grab has undertaken (is undertaking) multiple efforts to increase revenue. For example, in Singapore it has raised platform fees charged to customers from S$0.3 (US$0.22) to S$0.7 this month.

  4. Deliveries GMV reduced by 9% YoY or 1% QoQ. We have listed the major factors impacting the food delivery demand (including the post-covid reopening) in Southeast Asia in our Food Delivery Platforms in Southeast Asia 2023 report.

    Of course, Muslim fasting month Ramadan this year started on 23 March, ahead of usual, impacting the demand during the week or two of Q1. Other than that the platform’s monetisation drive (delivery fees, priority fees etc.) also impacts the demand – a major contributor to the 2X revenue growth despite reduced GMV.

  5. Ride hailing is no doubt a continuous money spinner for Grab, where it dominates in most Southeast Asian markets. Segment adjusted EBITDA almost doubled YoY in Q1 2023 (albeit flat QoQ perhaps due to seasonality).

    Grab mentioned that it continues to boost driver supply, and we feel they need to continue working on this front as many consumers we personally know in Singapore are struggling with finding a ride oftentimes. With reduced incentives filtering out the casual users, the core demand will probably not be impacted much by the increased platform fee mentioned in point 3.
  6. It is also interesting that Grab stopped reporting its commission rates. This is probably an effort to change the focus of the narrative – revenue growth is good and takerate increases/decreases will both cause controversy.(We did some calculations, take rates barely moved).Separately, in their Q1 report, SEA Group stopped reporting Shopee’s GMV – an effort to reshape the narrative about the priorities in the region’s ecommerce market.
  7. Monthly Transacting User (MTU) numbers, which increased from 32.7 million to 33.3 million, still only represents only about 5% of the population of Southeast Asia. (we have compared this metric extensively in the Apples to Apples 2.0 report too). Over the last few quarters, Grab has sent a few signals to the market that it should focus on the relatively premium customers, while the rest of the region will take more time to be looped in consistently.
  8. Cash situation is still healthy. The current net cash liquidity will last Grab for more than 8 years based on the Q1 2023 burn rate – more than enough for the company to breakeven and generate a profit.

Sea and Grab earnings and share prices are closely watched by investors not only because of the reflection on their respective companies, but the bigger Southeast Asian narrative. The companies will need a few more quarters to fully prove themselves, and there are areas of growth which we feel could still be better tapped in these companies’ ecosystems (e.g. consumer lending for Grab). 

We also feel that there is much more than just Sea and Grab for Southeast Asia’s tech narrative – the region generated a solid US$4.6billion investor exit proceeds in 2022, with a majority coming from trade sales and secondaries. You can find more in the presentation deck of last week’s joint Momentum Works – Cento Venture session “On Stranger Tides: Southeast Asia tech investment in 2023”.

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 [email protected].