Toss, GoTo Compete With Grab for Super App Supremacy in SE Asia

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In the age of the super app, especially in South Korea, competition is ramping for top of mind, top of wallet — and the chance to grab some share from Grab.

As noted in Financial Times, Viva Republica, which is the parent company of the super app Toss, is looking to raise as much as $1 billion next quarter from outside investors on the way to an initial public offering (IPO). Funding rounds as recently as June of last year value Viva Republica at $7.4 billion.

Read more: South Korean Startup Tosses Its Hat Into the Super App Ring

Money raised in the funding rounds and, ostensibly, in the IPO would go toward expanding the Toss app.

The general concept of the super app is to become a one-stop shop, a digital front door that connects a continuum of activities, from commerce to buying insurance to investing to hailing a ride.

A glance at the Toss website reveals that the company has 21 million cumulative subscribers, and 11 million active uses in South Korea. It also counts 50 services launched to date. The company has said that more than 80% of people in their 20s and more than 60% of people in their 30s use Toss.

Upon launching the Toss Securities’ mobile offering last year, the company said that the potential customers for Toss Securities are more than 10 million individuals.

Expansionary Efforts

In its expansionary efforts, Toss is bumping up directly with Grab’s own efforts to cement presence in Southeast Asia. Toss has presence in Vietnam, with a focus on money transfer and debit card offerings and is boosting its efforts in Malaysia, Indonesia and India, among other nations.

For Toss, it may be a case of striking while the iron is hot, even as another competitor, GoTo (with 55 million transacting users) seeks its own IPO as early as next month.

See more: Super App GoTo Readies $1.3B IPO on Indonesia Stock Exchange

Grab continued to offer higher commissions to attract drivers, as well as greater incentives to users and partners. There were also additional expenses relating to the company’s December  IPO). Expansion comes at a price, especially in the bid to achieve critical mass.

Read more: IPO Overhead, Driver Incentives Take Bite out of Grab’s Earnings

Grab is launching a digibank in Singapore this year, according to reports. And by the numbers, fourth-quarter revenue was $122 million, down 44% year over year. Average monthly transacting users (MTUs) for 2021 were 24.1 million, down 2% year over year, mostly because of third-quarter lockdowns due to the delta and omicron variants of the coronavirus. Fourth-quarter EBITDA, a rough measure of cash flow, was down by $203 million year over year to $305 million.

Out of the gate, upon going public late last year, shares in Grab sank by 20% in the first day of trading. At a recent $3.70, the shares traded well off that first day tumble, where the stock ended the session at $8.75.

See more: Grab Goes Public as Super App Competition in SE Asia Heats Up

Recent investor materials from Grab showed that monthly transacting users stood at 27.7 million, evidence of a recovery in demand, in part as the pandemic’s ferocity may be abating. Interestingly, those same materials indicated that category share in eWallet is 21%, indicating that financial services remains a bit of an open field for competition.

Up for Grab(s), or a Toss-up, perhaps — and puns aside, the competition will get ever more heated.