If a deal is reached it will break records as the largest SPAC merger so far. The Southeast Asian ride-hailing startup is talking with one of two SPACs associated with Altimeter Capital Management LP, the sources said, per the Journal.
As part of the agreement, Grab would raise between $3 billion and $4 billion in a funding round called PIPE, which is almost standard in a SPAC merger, the sources said. As Grab and Altimeter begin discussions with additional investors, the dollar figures could change, some of the sources said.
A traditional U.S. initial public offering (IPO) could still be a possibility if SPAC talks dissolve. An announcement is expected in the coming weeks.
SPACs raised in excess of $70 billion this year, a new record. Over 70 percent of all public share sales are a result of blank check mergers, according to Dealogic, per WSJ. WeWork, Shutterfly and SoFi are just a few of the companies going public via SPACs.
Grab was co-founded by Anthony Tan and Tan Hooi Ling in 2011 and initially offered ride-hailing services. It has since grown to provide delivery services to households and digital financial services to merchants.
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Some of the startup’s biggest backers include SoftBank, Uber and Toyota. Grab was valued at about $15 billion following a funding round in October 2019, according to PitchBook, per the Journal.
Altimeter, a Silicon Valley venture capital firm, has two SPACs — Altimeter Growth Corp. and Altimeter Growth Corp 2. It manages about $16 billion and mostly puts money into technology firms. Altimeter Growth Corp. raised $450 million in an October 2020 IPO. Altimeter Growth Corp. 2 raised $400 million in a January IPO.
Grab has been strategizing with J.P. Morgan Chase & Co. and Morgan Stanley to find a SPAC merger deal. There are currently numerous tech unicorns in the Southeast Asian region looking to go public via SPACs.
