To The Moon

I don't mind that they are not profitable. I also can look past that their revenue has declined due to Covid lockdowns. I do however have quite a few big concerns that I will list here:

1. There is no gross margin profile so far. Not unusual for and early stage company, but more worrying is the sizeable increase in spend on incentives. They are accelerating spend to acquire revenue (vouchers, points, rewards etc). Will grab be able to retain its position without incentives? That is the big question.

2. The bulk of the business they are involved in ie ride share,food delivery etc. is very localised. So if let's say they are dominant in those areas in Singapore, this adds zero value to users in other countries. If I live in Malaysia, it's no use to me that they have many drivers and food options in Singapore! This is unlike e-commerce where new vendors or customers being added in one country does have value to everyone else in the eco system.

3. SEA is a fast growing region but it is also very fragmented. Doing business in Singapore is very different to doing business in Indonesia or Thailand. This means a lot of targeted investment is needed per country. Considering what I said in point 2, I am not sure the investment can scale. Wantproof how difficult it can be? Just see how Gojekis struggling in spite being the leader in Indonesia. Without focus and sufficient loca investment and know how it's really hard to fly.

4. This also leads me to wonder about their moat. As in point 2, network effect is weak at best. Doesn't look like they can keep competitors out in business areas like food delivery either. A local competitor with better in country know how would threaten their market share quite quickly In the respective countries.

5. I like their superapp strategy that attempts to mimic Alibaba / Alipay formula. But we must remember, Alibaba / Alipay serves a huge homogeneous market in China. Being a superapp in a smallmarket like Singapore alone doesnt have the same level of attractiveness. So it will only be worthwhile if they become the superapp for the region. But that has too many things beyond their control (ie politics, culture etc.)

Folks may think, since Temasek is in, it should besafe right? Bad news is, they being early investors when they were still a private company means they have gotten shares at a much much much cheaper price than what you and I would be gettingas retail investors in the public markets.

I personally dont think it's investable.I certainly have no idea how to value it since it's very much a "bet and hope" at this point. At 20B+ market cap, too expensive a bet for me purely based on hope.