Ordered some GrabFood during the circuit breaker? Called for a GrabCar to avoid crowded buses and trains? You helped enrich super app Grab and its co-founder and chief executive, Mr Anthony Tan, who has seen his net worth rise to US$790 million, according to Forbes.
Mr Tan, 39 years old, the son of Malaysia car distributor Tan Chong Motor‘s president Tan Heng Chew, was born in Malaysia and is now a Singaporean.
Your great grandfather was a taxi driver, your grandfather started the Japanese automotive industry in Malaysia, but your female friends suffer a lot of safety issues when taking a taxi. Why don’t you do something about it?Anthony Tan said in a 2014 interview with the Financial Times
The tease turned into a catalyst for Tan and another HBS classmate Tan Hooi Ling, and GrabTaxi, Malaysia’s answer to Uber, was born. The pair wrote a business plan for a mobile app that connects taxi seekers directly with taxi drivers closest to their location in the chaotic Malaysian urban environment. The drivers would be supplied with smartphones so they could communicate directly with prospective customers, thus saving valuable time and money wasted in driving endlessly seeking fares. It was an Uber-like app aimed at benefitting beleaguered taxi drivers and making customers feel safer and better served. Unlike Uber, which has upset local taxi markets by launching a competitive force to cab drivers, GrabTaxi is working with taxi drivers to help them do better business.
Tan knew the benefit of first mover advantage in a market and he made that a part of the business plan, which was a runner-up in the HBS New Venture Competition in 2011. Using the $25,000 from the NVC and his own personal funds, Tan and his co-founder launched the mobile app, first called MyTeksi, in June, 2012. He managed to find early round financing from several investors in the U.S. and Asia and despite his family’s unhappiness with his decision to forego his role at Tan Chong Motor, Tan pressed ahead aggressively.
According to the FT article, Tan was heavily influenced by HBS “entrepreneurship classes and meetings with people such as Steve Chen, co-founder of YouTube, and Eric Ries, the `lean startup’ guru, which opened his eyes to new opportunities, much to the displeasure of his family.”
My family had a tough time understanding what I was trying to do and I don’t blame themAnthony Tan said in a 2014 interview with the Financial Times
Unlike many startups, Grab Taxi faced a raft of local issues, both logistical and political, that made his effort even more difficult. Dealing with unions, government bureaucracies and even criminal attacks, Tan’s resolve has been tested. But he has persevered and by December, 2014 Grab Taxi had reached an impressive $340 million in funding. A whopping $250 million investment by Japanese telecom firm Softbank Corp. in December was a huge stamp of approval and made Softbank the top investor by far in Grab Taxi.
GrabTaxi has already been launched in 17 cities in five countries, including Singapore, Thailand, Vietnam, Indonesia and the Philippines, and has been downloaded more than 3.3 million times. At least 650,000 people are using it to get taxis at least once a month which translates into six bookings per second. .
The task of invading a legacy marketplace with a technology-based product, especially in chaotic Asian markets, has taken a toll. A technology glitch last year left many of the 60,000 drivers in Grab Taxi’s network, angry and frustrated. Tan told the FT that the experience left him chastened but wiser. “What we’ve built sounds glamorous but if you really want to be hardcore and survive in this race, you need to be hyper paranoid and constantly thinking that the guy on your right is trying to murder you,” Tan said.
That guy on the right might be Uber, which is already operating in more than 40 countries and has its own sights on the Asian marketplace.
“We will do whatever it takes to ensure that we maintain our leadership in an ethical and moral way,” Tan said when the Softbank investment was announced. “It’s a fight for market share. We’re many times bigger than our closest competitors and we intend to grow that fast.”
For a man who says he knew he wanted to be a businessman as early as age six, Tan is unafraid of taking risks. He credits HBS as the place where his idea was born but it was being out in the streets in Kuala Lumpur, riding in taxis, talking to taxi drivers and being unafraid to introduce technology into a reluctant new environment that turned his concept into a real business.
Speaking to e27, a blog about Asian startups, Tan said he believes in the Japanese philosophy of “see yourself, do yourself, cure yourself.” “Every time we hire someone at GrabTaxi, we spend a lot of time talking about what our values are, about mutual trust, about reputation,” Tan said. “I tell employees `You must be a taxi driver for one day. You must talk to the driver, feel his pain. We all know how it is to be a passenger, but always look at the driver when you build a product. You must always build from their point of view.”
For Tan, the early success has made believers out of many early skeptics, including his father. “He didn’t disown me the last time I checked,” Tan said. “Building something from scratch from just a PowerPoint and seeing the lives we affect is a lot more rewarding.”
According to reports in July, his wife Chloe Tong bought a freehold property in the Bin Tong Park good class bungalow area for $40 million.
The Spac boom may be deflating after more than a year of frenzy, but it’s still creating vast riches for the right deals.
Take Grab Holdings, South-east Asia’s ride-hailing and delivery giant, which is merging with the special purpose acquisition company (Spac) Altimeter Growth Corp and plans to go public in the US by July.
The transaction will give the Singapore-based company a market value of US$39.6 billion (S$52.6 billion) up from a valuation of US$16 billion earlier this year.
For co-founder and chief executive officer Anthony Tan, who will hold 2.2 per cent of Grab after the deal, that means his fortune will surge to US$829 million, based on the stock he will own. The shares co-founder Tan Hooi Ling and president Ming Maa will have will be worth US$256 million and US$144 million, respectively, according to the Bloomberg Billionaires Index.
Shares of the Spac are trading about US$3 above the deal price, meaning that the CEO could soon become a billionaire. A Grab representative declined to comment.
“The market’s positive reaction to the Grab merger signals strong investor enthusiasm for transportation technology and the future of mobility,” said Mr Asad Hussain, senior analyst for mobility technology at research and data provider PitchBook. “We expect continued growth.”
The two co-founders met at Harvard Business School while working on their MBAs between 2009 and 2011. They came up with an idea for delivering safe taxi services in their home country of Malaysia, and Anthony Tan gave up his family’s business, one of the nation’s biggest auto distributors, to focus on the plan.
In 2012, the two started a cab-hailing app known as MyTeksi, which later relocated to Singapore after raising money for a regional expansion. The start-up, rebranded as Grab in 2016, now encompasses food delivery, online payments and financial services.
The company generated US$1.6 billion in adjusted net revenue in 2020, according to a filing last week. It is forecasting earnings before interest, taxes, depreciation and amortization will turn positive in 2023 with adjusted net sales growth of 42 per cent for the next three years.
Like some other start-ups about to go public, Grab has created an endowment fund for partners and South-east Asian communities. In its first effort, GrabForGood will provide support for Covid-19 vaccinations. The initial funding is estimated at US$275 million in cash and shares, with the company’s two co-founders and Maa pledging a combined US$25 million of their stock.
“I don’t track how much I have because it doesn’t matter,” Mr Anthony Tan said in an interview. “We’re blessed to be able to take Grab public, and we’ve set up the GrabForGood endowment fund to ensure that our commitment and resources to serve the community will continue to grow even as the company grows.”
While Grab’s listing is boosting some individual fortunes, the biggest beneficiary is Japanese conglomerate SoftBank Group, which injected about US$3 billion into the firm through a series of investments starting in 2014. After the deal, its Vision Fund will own an almost 19 per cent stake worth about US$7 billion.
Uber Technologies and Didi Chuxing Technology will have holdings of US$5.4 billion and US$2.8 billion, respectively. Some family offices have also bought in, including Man Capital of Egyptian billionaire Mohamed Mansour.
Asian firms linked to the tech industry have been doing well in their US debuts. South Korean e-commerce giant Coupang, also backed by SoftBank, surged 41 per cent when it started trading in New York last month after pricing its initial public offering above a marketed range and increasing the size of its share sale. That made Coupang founder Bom Kim one of the world’s richest people.
While the enthusiasm for Spacs has been receding amid a US Securities and Exchange Commission crackdown, PitchBook’s Mr Hussain is optimistic.
“Investors look at the reaction to the Grab Spac and see that as a positive sign that US equity markets are in a very suitable environment to be in right now,” he said. “The success of the Grab Spac will pave the way for more South-east Asian start-ups in particular to consider listing through Spacs.”