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Once Southeast Asia's most valuable startup, Grab falls US$13 billion behind GoTo

Grab and GoTo have been locked in an expensive battle for dominance over the past several years.
GoTo has fallen less than its Singapore rival, and its market value of about US$26 billion is now twice that of Grab. (PHOTO: Bryan van der Beek/Bloomberg)

By Olivia Poh

(Bloomberg) — Singapore’s Grab Holdings Ltd., once Southeast Asia’s most valuable startup, is faltering behind GoTo Group in the public markets as it fights to gain ground on its Indonesian ride-hailing rival’s home turf.

The unprofitable companies are both struggling to convince investors of their moneymaking potential after staging their stock-market debuts in recent months. Yet GoTo has fallen less than its competitor and its market value of about US$26 billion is now twice that of its Singaporean peer. The companies are each set to report quarterly earnings in the coming days.

Grab and GoTo have been locked in an expensive battle for dominance over the past several years. Grab still counts the city-state of Singapore as its largest market even as it tries to expand in countries including Indonesia, Southeast Asia’s largest economy. GoTo is enjoying a leadership position in its home nation of more than 270 million people whose mobile-savvy consumers are shopping on its online-retail platform Tokopedia and ordering rides and food via its Gojek’s app.

The growth potential of Indonesia has helped GoTo outperform Grab, which became a publicly traded company through a merger with Brad Gerstner’s Altimeter Growth Corp. in December. GoTo has lost about 3% since its initial public offering in Jakarta in April, while Grab is down more than 60% since combining with the US blank-cheque company.

“GoTo’s advantage as a homegrown Indonesian brand and its synergy with Tokopedia may let the country’s biggest tech firm defend food-delivery market share from Grab, the category’s leader in Southeast Asia, and improve profitability,” Nathan Naidu, an analyst at Bloomberg Intelligence, said in a July 20 report.

While Gojek has a strong grasp of the crucial Indonesia market, Grab has made inroads in food delivery. Grab had 49% of the Indonesian food delivery market last year, compared with GoTo’s 43%, according to Momentum Works.

Grab is scheduled to report second-quarter results before US markets open on Thursday, while GoTo is set to release results on Aug. 30.

© 2022 Bloomberg L.P.