Southeast Asian super app Grab is expecting to reach breakeven at the group level by the second half of 2024, its executives said during the company’s investors conference on Tuesday.
Grab’s chief finance officer Peter Oey said that the breakeven for the company’s entire delivery business would be reached by Q2 2023. Grab also expects digital bank operations to achieve breakeven by 2026.
The Singapore-headquartered firm expects losses to peak next year as it is aggressively investing in digital banks in the three markets of Singapore, Indonesia and Malaysia. Digital banks in Malaysia and Indonesia are slated to launch in 2023.
“The key focus for us is to reduce the [financial service] segment’s adjusted EBITDA losses in the years ahead. Part of that will be driven by being focused on platform transactions and staying away from off-platform transactions,” Oey said.
In the financial service business, Grab’s chief operating officer Alex Hungate said new products such as deposits, lending and insurance will help increase users’ and merchants’ loyalty. “[That] is a really important part of the moats that we’re building up as an organization. The cross-selling opportunity is also very high,” he said.
Hungate added that digital banks will be the next frontier of growth for Grab.
Meanwhile, Oey revealed that Grab projected its adjusted EBITDA loss for H2 2022 at $380 million, which represents a 27% improvement compared to $521 million in the first half.
The company will continue to drive its core businesses, to maintain the EBITDA margin of 12% in mobility and over 3% in delivery services.
It will focus on driving higher quality GMV growth, while scaling what it sees as future growth levers, including advertising, GrabUnlimited and GrabForBusiness.
“We will not stop optimizing our corporate cost structure to drive the growth of our platform, whether it’s staff cost or cloud computing costs,” Oey said, adding that the company will also be selective in inorganic growth.
Bullish on regional growth
After 10 years of operations, Grab has onboarded five million registered drivers and four million registered merchants, serving 32 million monthly transacting users on its platform.
The company reached 10 billion rides in July 2022, a 10x growth after five years.
“We hold tremendous conviction in Southeast Asia’s short-term and long-term growth. Southeast Asians are mobile-first, and highly digitally engaged. And our key segments are still under-penetrated even after a COVID-19 digitization wave,” exclaimed Grab’s co-founder and CEO Anthony Tan.
“We look forward to more volume growth when a full recovery happens,” he added.
In addition, the support by local governments in terms of the digital economy around areas such as fintech and the digitization of small businesses also plays a significant part in driving the growth of the region.