Korean funds, firms eye jackpot from Grab’s Nasdaq listing

South Korea’s National Pension Service (NPS), other state-run savings funds and big companies are expected to pocket decent gains from their investment in Grab, Southeast Asia’s biggest unlisted startup set to go public on Nasdaq in coming months.

According to the investment banking industry on Apr. 14, Korea’s major limited partners (LPs) invested a combined $200 million in Grab through domestic private equity firm STIC Investment Inc. in August 2020. The Singapore-based ride-hailing company’s corporate value was estimated at $15 billion at the time.

STIC Investment’s 1.2 trillion won Special Situation Fund (SSF) II had put $75 million into Grab and raised $125 million in bridge loans to invest in Grab.

The SSF II had drawn 400 billion won from the NPS as the anchor investor; 150 billion won from the Korean Teachers' Credit Union (KTCU) and Korea Post, the country’s national postal service; and 100 billion won from the Teachers’ Pension, a scheme for Korea’s private school employees.

STIC Investment is currently replacing the $125 million bridge loans with money from a co-investment fund with the existing LPs.

Once listed on Nasdaq, industry watchers say the Korean state funds will likely reap a return of more than twice their investments in Grab.

SUPER APP IN SOUTHEAST ASIA

Grab said it is going public in the US through a merger with a special purpose acquisition company (SPAC) named Altimeter Growth Corp.

The deal values Grab at $39.6 billion, making it one of the most valuable companies in Southeast Asia and the biggest company ever listing on Nasdaq through a SPAC, according to media reports. The listing will take place “in coming months,” they said.

Often dubbed “Uber of Southeast Asia,” Grab has been diversifying its operations across Asia, evolving from a ride-hailing app to a Southeast Asian super app that offers several consumer services, including food delivery and financial services.

It operates in Singapore, Malaysia, Cambodia, Indonesia, Myanmar, the Philippines, Thailand and Vietnam.

COLLABORATION WITH KOREAN FIRMS

Grab has also collaborated with major Korean companies such as Hyundai Motor Co., SK Inc., formerly known as SK Holdings Co., Naver Corp. and Mirae Asset Securities through business tie-ups and investments.

In 2018, Hyundai Motor and sister firm Kia Corp. invested $200 million and $75 million, respectively, in Grab. Mirae Asset and Naver made a joint equity investment worth $150 million in the ride-hailing company.

Meanwhile, SK Inc. invested $230 million in Grab through a Series G round of funding in 2018. SK is expected to earn about 240 billion won in return for its investment.

“Korean companies and state funds will see a twofold or even threefold increase in gains from their investments in Grab in just three years. That’s a decent gain,” said an investment banking industry official.

Write to Jin-Seong Kim and Jun-ho Cha at Jskim1028@hankyung.com
In-Soo Nam edited this article.