Grab Holdings Ltd, Southeast Asia's biggest super-app, expects to reach breakeven for its digital bank (digibank) by 2026.
Grab’s Chief Operating Officer, Alex Hungate, said, at the company’s first Investor Day on Tuesday, that one of the company’s key strategies going forward was to “focus on its fintech services and create a platform for the launch of our digibanks”.
Apart from Singapore where Grab has tied up with Singtel to launch a digibank, the two companies along with a consortium, are in the process of setting up a digital bank in Malaysia. The company also has plans to set up digital banks in other markets where it operates.
During a presentation at the Investor Day, Grab said it expects to break even on a group adjusted, earnings before interest, taxes, depreciation and amortisation (EBITDA) basis, by the second half of 2024.
For the second half of 2022, the group’s adjusted EBITDA was expected to be US$380 million, (S$545 million), a 27 percent improvement compared to the first half of 2022.
Grab, which counts Japan’s SoftBank and Uber Technologies among its biggest investors, also announced that it expects its revenues to grow strongly, between 45 percent to 55 percent year-on-year in 2023 on a constant currency basis.
Five million drivers
Operating in 480 cities across eight countries, Grab has more than five million registered drivers and more than two million merchants on its platform.
The company said its segment-adjusted EBITDA margins for mobility have “recovered back to their expected steady state of 12 percent” as of the second quarter of 2022.
Grab is moving towards a segment-adjusted EBITDA breakeven by the second quarter of 2023 and steady-state margins of 3 percent and above.
It added that the company’s driver-partner levels are currently at approximately 77 percent of pre-pandemic levels.
Grab said it has expanded its pilot monthly subscription programme, GrabUnlimited, to five countries, Indonesia, Malaysia, Singapore, Thailand and the Philippines.
According to the company, the average GrabFood gross merchandise value (GMV) from GrabUnlimited subscribers was 2.4 times higher than from non-subscribers, with subscribers also transacting two times more on average compared to non-subscribers.
Grab added that it is now 100 percent self-sufficient with GrabMaps, with Grab services in all eight countries now fully powered by Grab's own map tech and location-based intelligence".
Grab estimated that the use of its own maps helped it to avoid “tens of millions of dollars” in potential third-party mapping fees every year.
Grab’s CEO and co-founder, Anthony Tan said the company plans to leverage the “power of the superapp ecosystem as a competitive moat to strengthen our leadership in the region, even as we continue to optimise our costs”.
“We will drive towards becoming Southeast Asia’s largest and most efficient on-demand platform that enables local commerce and mobility,” Tan said.
