Grab Was Already the Uber of Southeast Asia. Now the ‘Super-App’ Wants to Deliver Financial Equality, Too

The lunchtime rush is just bubbling at Kedai Kopi hawker center in Singapore’s Clementi neighborhood when Anthony Tan strolls in. The co-founder and CEO of the ride-hailing firm Grab orders himself a Horlicks malt drink, sits at a Formica table, and takes a sweep of the bustling vendors. One catches his eye: a stall selling nasi lemak, the signature Malay dish of fragrant rice cooked in coconut milk and pandan leaf. Back in 2012, Tan used to offer it to taxi drivers gassing up in his hometown of Kuala Lumpur, pitching his upstart service while they ate.

“But because we couldn’t afford to do a deal with the petrol station, they chased us out,” Tan, 40, recalls. He decamped to a nearby sidewalk by fetid monsoon drains. “It was so smelly,” he says. “But it was close enough to shout over, ‘Hey uncle, do you want free nasi lemak?’”

In the years since, Grab has transformed from a “street fighting” startup, as Tan puts it—scoring Southeast Asia’s biggest Nasdaq IPO in 2021, valued at around $40 billion. But that hasn’t kept Tan sequestered in his office. Opposite the nasi lemak stall is another for fiery Peranakan seafood, where Tan pulled a four-hour shift during the pandemic. With lockdowns decimating Grab’s ride-hailing business, it pivoted to food delivery, and Tan wanted to better understand vendors’ needs. He ended up “cleaning live crabs and absolutely covered in bits of shell and crab juice,” he laughs. “But I saw that when the orders came out in -English, the Chinese-speaking chefs couldn’t understand them. After that we made the tickets in both languages.”

Tan’s anecdotes help to explain why Grab, with a market cap of $12 billion, is one of Southeast Asia’s most valuable firms. Its green-attired delivery drivers are ubiquitous in over 500 cities across eight nations. Often compared to Uber, Grab is much more, fast becoming a fully fledged super-app, offering insurance, travel bookings, financial services, and more.

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Tan envisages making Grab a “triple bottom line” company, measuring success not only by its balance sheet but also by its social and environmental impact, particularly through the financial services it now offers. Southeast Asia may be the world’s fastest-growing region economically, but those gains are uneven and 70% of the population is “underbanked,” not relying primarily on traditional banks. Tan’s pitch is that by bringing more small businesses into the digital economy, he can boost Grab’s earnings while fostering equality. “There are many ways you can build social impact and create financial impact—they’re not mutually exclusive,” he says. “If you don’t build a society that’s stable, and you don’t uplift the bottom, it becomes all of our problem.”

Mobility is in Tan’s genes. His great-grandfather was a taxi driver and his grandfather an automotive tycoon. After attending Harvard Business School, Tan decided not to join the family business, Tan Chong Motor, which his father runs, but to go it alone. Inspired by classmate and Grab co-founder Tan Hooi Ling’s horrific experiences with Kuala Lumpur taxis—by some rankings the world’s worst—Tan asked his dad to back their ride-hailing venture but was told “your head is in the clouds,” he says. So he went to his mom, who thought the same but still agreed to back him. “Moms are amazing, right?” Still, for a young man born “with a silver spoon,” Tan admits, the move was scary. “My dad basically disowned me,” he says. “I thought, I’m not going to grovel. I’m going to fight and make sure we win. That was a pivotal moment.”

Whereas Uber took a cookie-cutter approach to global expansion, Grab’s growth was rooted in being hyper-local. In Cambodia, it offers tuk-tuks; in Indonesia, users ride pillion on motor-cycle taxis. While Uber launched delivery ice cream, which often arrived in a slushy mess in the unforgiving tropics, Grab rolled out Southeast Asia’s “king of fruits,” durian, which remains a huge money spinner. But like any disrupter, Grab has faced pushback. In Thailand, where it operated illegally until rule changes in 2021, local taxi competitors held protests against Grab, brandishing placards of Tan in a coffin: “This job is not for the fainthearted.”

Meanwhile, Grab’s shares now trade at less than a quarter of their IPO price. Tan puts this down to “timing,” given the drying-up of cheap money.

These setbacks haven’t deterred Tan. Last August, Grab launched one of Singapore’s first digital banks, in partnership with telecom firm Singtel, and is rolling out more across the region. Interest is paid daily instead of monthly, and small loans can be approved in minutes. For Tan, the need was made plain by a conversation at church. A fellow parishioner confessed to spending a stint in Singapore’s Changi prison for being a loan shark’s goon, who would splash pig’s blood on debtors’ homes to intimidate them. “He said there were thousands of people like him in Singapore,” says Tan. “It’s fundamentally wrong to charge somebody 20% a day interest, because you’re putting them in a real poverty trap.”

The pandemic served as another inflection point. While ride hailing ground to a halt, lockdowns also meant that small businesses had no choice but to embrace digitization. Buoyed by government stimulus packages for small businesses, in just one year Grab added over 600,000 merchants across the region, offering everything from dog bowls to apple strudel. “The COVID crisis became an opportunity for us,” says Tan.

It was also a lifeline for people like Suparno, 52, who like many Indonesians uses one name. The father of three owns a tiny fruit stall in Bali’s Taman Sari Market, which overflows with lush mangosteen, papaya, and watermelon. When Indonesia shut its borders during the pandemic, tourism-reliant Bali suffered more than most, and Suparno’s trade fell 70%, he says. Struggling to feed his family, he became the first vendor in Taman Sari to join GrabMart. By selling his fruit via the app, and using its data-crunching service to bundle in-demand items together, trade quickly recovered to pre-pandemic levels. Today, practically every business in Taman Sari displays a green GrabMart logo, and Suparno plans to open a third stall.

But the leap to digital revealed other benefits. Suparno’s business was previously cash-based, which meant carrying around large wads—a risky proposition—or braving long 9 a.m. queues at the bank before heading to the wholesalers, by which time the best fruit had often been snapped up. Now, any GrabMart sales Suparno makes before midnight appear in his GrabPay account by 4 a.m., meaning he can restock before the bank has even opened. “It helps a lot because mornings are my busiest time,” he says.

It demonstrates how better access to digital financial services helps small businesses compete, which Tan hopes will translate into higher revenue for his firm. Grab’s financial-services revenue grew 233% year over year in the first quarter of 2023, with loan disbursements up 45%. In 2022, small merchants on Grab saw a 26% increase in average monthly earnings after a year on the platform. Still, despite boasting over 32 million monthly users and expecting revenue of $2.2 billion in 2023, Grab has yet to turn a profit, with Tan expecting to finally break even by year’s end. “Grab’s success is also their problem,” says Jeffrey Towson, an investor and consultant on digital strategy in Asia. “They’re dominating the market, with high-frequency services, lots of engagement, which means lots of data. But they’re still struggling to get profitability, because that’s just the nature of the business they’re in.”

Supplementing the low-margin ride-hailing sector with higher-margin add-ons is a main driver behind Tan’s super-app vision. He says it also helps merchants to boost their income through secondary services. Drivers can earn from deliveries but also by hosting advertising brokered via the app, or wearing a helmet camera funneling data to Grab’s own maps offering, which it sells to third parties like Amazon Web Services. Last year, 72% of Grab’s drivers earned from more than one of its services, while over a million took part in one of its 2,500 training and upskilling courses. “When we create more inclusion, society benefits,” says Tan. “What’s good for society is good for business.”

Correction, June 1.

The original version of this story misstated when Grab is expecting $2.2 billion in revenue. That figure is for 2023, not 2022.