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Singapore-based multinational ride-hailing company Grab Holdings Inc. has reportedly secured USD 2 billion from its recently conducted loan funding. Touted as the highest institutional debt in Asia’s technology sector, the company intends to use the newly secured funds to expand its regional services.
Sources aware of the development stated that the five-year senior secured load was increased from the previous USD 750 million after Grab obtained commitments from multinational investors. In this context, the CEO and co-founder of Grab Anthony Tan mentioned that the company is making consistent progress in achieving sustainable milestones.
The loan will be utilized for general corporate purposes and will enable Grab to diversify its finances. Moreover, the company claims that the interest rate on the loan was reduced by 100 basis points from its original launch guidance to around 450 basis points over London Interbank Offered Rate (LIBOR).
For those unaware, Grab has evolved from a ride-sharing platform to a one-stop-shop for services including insurance, payments, and food delivery in Southeast Asia. The company is backed by prominent investors such as the Japanese multinational conglomerate SoftBank Group Corp.
Grab is ranked as one of Southeast Asia’s most valuable startups, with a valuation of around USD 16 billion. The company was also granted a digital bank license in Singapore, sources claimed. The company claimed that its total group net revenue soared by 70% in 2020, which is more than its pre-pandemic levels.
If reports are to be believed, Grab’s food business, which currently accounts for 50% of the total revenue, has witnessed substantial expansion amidst the sector-wide boom in food delivery services, especially during the COVID-19 lockdowns. The company believes that its food delivery division to breakeven by the end of 2021.
Grab’s new loan funding was led by JPMorgan, while the joint book-runners were Barclays, HSBC, Deutsche Bank, MUFG, Mizuho, and Standard Chartered.
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