Grab shares tumbled 10% in morning trading as its growing investments hurt quarterly revenue.
Grab Holdings Ltd, the largest ride-hailing and food delivery firm in Southeast Asia, on Thursday reported a fall in revenue for the fourth quarter as it spent more on driver commissions and promotional offers.
Singapore-based Grab, in its first quarterly earnings report as a public company, said it invested in improving commissions for drivers to keep a steady supply amid the pandemic.
Founded in 2012 as a regional taxi app in Malaysia, SoftBank Group-backed Grab operates a "super app", which provides ride-hailing, food and grocery delivery, mobile banking and payments in Southeast Asia.
The delivery unit, which operates the GrabFood app a leading food delivery service in Southeast Asian countries including Singapore and Malaysia, recorded a 98% decline in revenue in the fourth quarter, hurt by people using coupons for payments.
Mobility revenue was down 27%.
Chief Financial Officer Peter Oey said in an interview that the driver demand shot up and the company was still catching up in terms of supply.
"All those elements (investments) will pay off in the long term," Oey said, adding that its two biggest units - mobility and delivery - were strong going into the first quarter.
Grab, which combined with blank check firm Altimeter Growth Corp in a $40 billion merger last year and went public in December, is also seeing rising competition from other "super apps" that provide a host of services under one app such as Gojek in Indonesia.
Grab's gross merchandise volume rose 26% to $4.5 billion in the quarter, powered by a 52% rise in deliveries and 29% in its financial services segment, even as the mobility segment saw a 11% drop.
Revenue was $122 million for the three months ended Dec. 31, compared with $219 million a year ago.