Ride-hailing company Grab posted a double-digit decline in revenue amid the COVID-19 pandemic, but is confident that it can stay afloat even through a 3-year recession.
In an interview with CNBC, Grab CEO Anthony Tan talked about the company’s current assets and how it may help his transportation business moving even amid a recession.
Tan mentioned how the coronavirus pandemic took its toll on Grab’s gross merchandise value (GMV) in different Southeast Asian countries.
Strong investor-base can tide Grab through a 3-year recession
According to Tan, the demand for transportation was reduced due to strict physical distancing measures.
Grab operates in hundreds of cities across eight countries in Asia that are all implementing strict community lockdowns and stay-at-home policies.
The pandemic has placed the global economy into its worst decline since the Great Depression as well, according to the International Monetary Fund (IMF). Based on IMF data, the global market is expected to shrink by 3% in 2020.
However, the CEO remains positive despite the situation, citing that his transport business has “sufficient liquidity” to keep them afloat amid the recession.
“Because of our strong investor base, we are fortunate to have ample liquidity to tide us through, whether it is a 12-month recession or a 36-month recession.”
The transport company has multiple and reliable investors, such as Singapore’s firm Temasek Holdings, SoftBank, and China’s ride-hailing giant Didi Chuxing.
Grab has signed a new investment deal as well with Mitsubishi’s UFJ Financial Group according to Crunchbase data, amounting to US$706 million [AU$1.1 billion].
Along with other investors, the company reportedly raised a total of $9.9 billion to date.
Diverse business model help Grab amid the pandemic
Tan also shared how Grab’s GMV which indicates the total value of sales for items and services sold on internet platforms has declined by double-digit percentage following the series of efforts to curb coronavirus from spreading.
On the other hand, the transport company’s diverse business model—which includes food and item delivery services—has helped Grab alleviate the income loss of many of its operators during the pandemic.
The CEO explained that by scaling up its non-transport services, it was able to adapt quickly to the new setting and, at the same meet the surge in demand in moving supplies around.
He is also confident about Grab’s strong recovery once the lockdown is over, citing that transportation is a mass-market essential.
Tan has also struck a $40 million investment as a response to drivers affected by COVID-19’s impact, including those who contracted the virus. He said that they should “focus on recovering than worrying about putting food on their table.”
Grab has also introduced new measures in countries where it is headquartered.