An investment thesis for Grab Holdings; by Noah Chatelle1

While GAAP net income is currently small, adjusted EBITDA is growing over 50%, signaling improved profitability and free cash flow generation. 

Grab maintains a strong cash position of about 47% of its market cap. Meaning, when you buy Grab, you are buying 47 cents of pure cash. Notably, it's been able to increase its cash position without diluting shareholders. The availability of cash provides the resources for Grab to generate consistent growth in adjusted EBITDA in the emerging market of Southeast Asia.1

The key growth driver for Grab is the consistent expansion of its user base (119M annually, with less than 6% of regional penetration), expanding to opportunities in advertising, now with 191K active advertisers, and financial services, which yielded 40% YoY growth and is expected to break even in 2026.

Grab's fundamentals are pushing the company to profitability and expanding to capture value in Southeast Asia.

Two high-margin opportunities for Grab:

1. Advertising ($236M annualized ad run rate)

2. Financial Services ($708M in loans as of Q2 2025)

Competition and potential acquisition of GoTo

Grab is positioned to benefit from natural consolidation with smaller, unprofitable competitors gradually exiting. Grab's ability to burn cash and expand its network, and implementation of the regional cultural values, has given it an edge against the American giant Uber, which has been unsuccessful in Southeast Asia. Recently, $GRAB has acquired Chope (reservations), Everrise (grocer), and Validus (supply invoice financing), demonstrating Grab's approach to strengthening its ecosystem.1

Grab's primary competitor is GoTo, competing in Indonesia, which is the region's largest population center. Earlier this year, Grab raised $1.5 billion in convertible notes at 0% interest (investors oversubscribed). Considering it already had $6 in cash, the raise is not necessary unless it is part of a strategic plan, potentially for an acquisition.1 This new capital may be part of a plan to acquire GoTo, their largest competitor, which has been facing profitability difficulties. Acquiring GoTo at the right price could significantly improve $GRAB's margins and gain more market share.

The Risk

A major pitfall for Grab is its margins. However, through increasing operating leverage, Grab should spend to expand market share and then continue monetization. 

There is a worry (and thus bearishness) whether or not $GRAB can sustain growth and FCF, not brought down to the bottom line, and the market's lack of understanding of the cash raise.1 It is possible that "market makers" are manipulating shares to keep excitement down.

Autonomous vehicles have been argued to threaten Grab. Something to consider, however, governments in the region are hesitant to deregulate self-driving to protect jobs in the taxi industry. At the same time, Grab is actively seeking partnerships with autonomous vehicle companies.

Conclusion and MICA Portfolio use

Grab's expansion will capture tremendous value in the rising market of Southeast Asia. Recent profitability and earnings growth, and innovating beyond its original taxi service, it is building its vision to be a superapp for the region.

Thus, the MICA Portfolio will continue to purchase and hold shares in $GRAB for the long term.

References:

Notably inspired and committed to Grab by a thesis written by @Amitisinvesting (Amit Kukreja), whose ideas are referenced in the thesis above.

1 - Amit Kukreja. "Grab Thesis & Current Thoughts – 6/20/25." https://docs.google.com/document/d/1fbpKXEO5Arm0QNdFm_2cJeszaIbwU1wY0-juEeH_jTU/

Investment thesis is not financial advice. Investing involves risk. See full disclosures.