- The 27% increase in incentives, but marginal increase in MTU and GMV per MTU implies Grab's growth is incentive-fueled, a red flag to Grab's growth sustainability.
- However, this finding neglects the recovery of Grab's ride-hailing business where the economic outlook isn't as pessimistic as expected due to vaccination progress in SEA.
- Grab's $40bn valuation implies that Grab's ride-hailing business will recover to pre-pandemic levels at $1.8bn revenue and grow at 27% CAGR for the next 5 years.
- Recovery to pre-pandemic levels and 27% CAGR is probable due to network effects, cross-selling new product offerings, reach via strategic partnership, and a 10x headroom to grow.
For further details see:
Grab's Incentive-Fueled Growth Is Not Ideal Going Into 2021Q4 AGC Merger