Grab is in talks to go public through a SPAC merger

As part of the deal, Grab would raise between $ 3 billion and $ 4 billion in what is called a PIPE, a round of funding that typically involves a SPAC merger, the people said. That amount may change, as Grab and Altimeter will soon start with mutual funds and other potential investors, some of the people said.

The parties could announce the deal in the coming weeks, although talks could still fall apart and Grab could revert to an earlier plan to host a traditional initial public offering on a US exchange this year.

Should they go ahead with an SPAC deal, it would be the culmination of a recent explosion in such transactions, with an empty shell raising money from an IPO with plans to later find one or more companies to merge with. In some cases, the SPAC only gets a small piece of the new public target.

The vehicles have caught fire in recent years, with everyone from former baseball player Alex Rodriguez to ex-House Speaker Paul Ryan taking part in the action. They have helped break a bottleneck between the private and public markets as companies that have been reluctant to go public combine with SPACs, which in many cases provide a faster route to listing with no fees and disclosure restrictions associated with traditional IPOs.

The largest SPAC deal to date is United Wholesale Mortgage’s approximately $ 16 billion combination with Gores Holdings IV Inc., announced in September. The largest so far this year is the agreement of electric vehicle company Lucid Motors Inc. last month to merge with Michael Klein’s Churchill Capital Corp. IV, a deal worth nearly $ 12 billion, Dealogic said.

So far this year, a record amount of more than $ 70 billion has been raised for SPACs, which, according to Dealogic, account for more than 70% of all public stock sales. A slew of companies are in talks about or have already agreed to a SPAC merger, including office exchange company WeWork, online photo bookmaker Shutterfly Inc. and online lender Social Finance Inc.

In addition to ride-hailing, Grab, which originated in 2011, provides restaurants, groceries and other items and digital financial services to merchants.

The supporters include SoftBank Group Corp.

, Uber Technologies Inc.

and Toyota Motor Corp.

According to PitchBook, it was last publicly valued at around $ 15 billion in an October 2019 fundraising round.

Its valuation is rising as public investors pile up in other driving and food delivery companies. Shares of Uber have rallied in recent months, while DoorDash Inc.

went public in December against a valuation much higher than where it had collected private money. The restaurant delivery company now has a market cap of nearly $ 47 billion.

The SPACs of Altimeter – Altimeter Growth Corp. and Altimeter Growth Corp. 2 – Raised $ 450 million and $ 400 million in October and January IPOs, respectively. Altimeter Capital, of Menlo Park, California, has approximately $ 16 billion under management and invests primarily in technology companies.

The company has secured a string of successful investments and was one of the key participants in a Roblox funding round in January Corp.

for its IPO at $ 45 per share. On its debut on Wednesday, the video game platform’s shares traded more than 50% above that level and continued to rise on Thursday.

SoftBank, which invested through its Vision Fund, is also poised to win big with Grab, just as one of its bets turns out to be a giant winner: the Japanese technology investing giant has now made about $ 25 billion on paper from its investment of $ 2.7 billion in South Korean e-commerce company Coupang Inc.,

which rose 41% during its trading debut Thursday.

Write to Maureen Farrell at [email protected]