Southeast Asian ride-hailing giant Grab is expected to be profitable in 2024

Grab, the Southeast Asian online car-hailing and express delivery service giant was valued at US$10.8 billion. The 10-year-old company will be profitable by 2024, despite slowing growth amid rising recession fears and rising inflation, the company said.

Grab is listed on Nasdaq and is backed by Uber and SoftBank. On Tuesday, local time, the company said that on a constant currency basis, revenue growth in 2023 would be between 45% and 55%, down from 2022 expectations. The company expects it's 2022 revenue to be between $1.25 billion and $1.3 billion.

Grab's shares have fallen sharply since it went public through a special purpose acquisition company in December 2021. In addition to never turning a profit, the company has also been hit by a sell-off in tech stocks, with the company's shares down 61% so far this year.

This statement is the first time that Grab has given a profit target, although the target has been adjusted and does not include special items such as restructuring costs. The company said it wanted to clarify its "refined and focused" strategy, focusing on local commerce and mobility.

"We expect the environment to remain tough," Alex Hungate, the company's chief operating officer, said in an interview at its headquarters in Singapore.

“We want to be the largest and most efficient demand-side platform in Southeast Asia. We are a single app for consumers, but we don’t do everything for consumers.”

Grab is trying to reassure investors that the company has $6 billion in cash and liquid assets and is in good shape. The company expects its adjusted loss to narrow to $380 million in the second half of the year, compared with $520 million in the first half.

Operating in 480 cities across eight countries in Southeast Asia, including Indonesia, Thailand, and Singapore, Grab has long been a barometer of the health of the region's consumer tech sector. The company started with ride-hailing and has since expanded into services such as banking, lending, grocery delivery, and hotel reservations.

Grab said the company dropped some cash-burning businesses that helped boost its reputation as a "super app" in Asia. The company lost $3.4 billion in 2021.

The company abandoned plans to enter backroom stores. Behind the scenes, the company built its own warehouses and distribution centers and bought wholesale inventory, switching to partnerships with big-box retailers such as Malaysian supermarket chain Jaya Grocer and Indonesian supermarket group Trans Retail. Grab's plans to move into so-called cloud kitchens are also slowly being phased out, Hungate said.

Grab said it didn't have to announce massive layoffs this year like other tech companies. Hungate added that the tech group will be hiring next year, especially in financial services.

The group has launched a digital bank in Singapore as part of a partnership with telecom group Singtel. In addition, the group plans to recruit staff for two other banks in Indonesia and Malaysia in 2023.