Analysis

Will more companies from Asia follow Grab ?

, NikkeiAsia

This year has seen a boom of SPACs, as vehicles for listing quickly on the U.S. stock market, which is even hotter than last year. But the explosion is reverberating in unexpected ways on the other side of the globe, namely in Southeast Asian and Indian capital markets.

The announcement on April 13 by Grab Holdings -- Southeast Asia's highest-valued startup -- seems to have ignited a chain reaction among a dozen or so regional unicorns. These private companies valued at $1 billion or more have become more interested in using SPACs as their preferred means of going public in the U.S. rather than the usual initial public offerings.

Investors are flocking from around the world to New York, hungry for new tech stocks and eager to gamble on high valuations based on growth expectations rather than cash flow. Grab's market cap estimates prove that those investors treat Asian internet startups just like Silicon Valley startups in terms of valuation.

After Grab's announcement, other Southeast Asian and Indian unicorns are lining up for mergers with SPACs to go public in the U.S. These include Grab's archrival Gojek of Indonesia, which is reportedly preparing to merge with e-retailer Tokopedia before going public via the SPAC route. Others in line for a SPAC merger include travel site Traveloka of Indonesia, as well as Indian unicorns and "soonicorns" like food deliverers Zomato and Swiggy, online retailer Flipkart, and online grocery Grofers.

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