Grab Holdings: The Super App Dominating Southeast Asia (Ticker: GRAB)

Summary

Chit Chat Stocks Podcast Summary

Title: Grab Holdings: The Super App Dominating Southeast Asia
Hosts: Ryan Henderson & Brett Schaefer
Release Date: July 16, 2025

---

Introduction

In this episode of Chit Chat Stocks, hosts Ryan Henderson and Brett Schaefer delve deep into Grab Holdings (Ticker: GRAB), exploring its rise as a dominant super app in Southeast Asia. Ryan presents a comprehensive research report, examining Grab's business segments, growth strategies, financials, competition, and management effectiveness.

---

Origins and Evolution of Grab Holdings

[00:00 - 05:28]
Grab Holdings was founded in 2012 by Anthony Tan and Tan Hui Ling during a startup competition at Harvard Business School. Originating as a ride-hailing service named MyTeksi in Malaysia, Grab quickly identified safety concerns, especially for female passengers, as a significant issue in Southeast Asia's taxi industry. This led to the development of a GPS-enhanced mobile app that connected passengers with nearby taxis, enhancing safety and reliability.

Notable Quote:
Brett Schaefer remarks, “[Anthony] grew up as one of the youngest in a wealthy family, lacking dire financial motivations but driven to establish his own venture” ([02:34]).

---

Business Model and Segments

Super App Transformation:
Initially focused on ride-hailing, Grab rebranded to simply "Grab" in 2016 to encompass a broader range of services beyond taxis, including motorcycles, private cars, and carpools. Today, Grab operates as a super app, integrating mobility, deliveries, and financial services.

Segments Breakdown:

1. Mobility:

   • Operations: Over 40 million monthly transacting users across eight countries.
   • Market Share: Dominates with 97% in Malaysia, 91% in the Philippines, 85% in Thailand, and 67% in Vietnam.
   • Fleet Management: Unlike Uber's model, Grab often owns or leases vehicles, promoting electric vehicles (EVs) to reduce costs and improve margins.

   Notable Quote:
   Ryan Henderson explains, “Grab partners with auto companies like BYD and Hyundai to control fleet expenses and boost driver supply” ([12:51]).

2. Deliveries:

   • Comparison: Functions similarly to DoorDash and Instacart in North America.
   • Growth: Represents Grab’s largest revenue segment, outperforming mobility with $1.1 billion in revenue and 55% EBITDA margins.
   • Strategic Acquisitions: Acquired Jaya Grocery in 2021 to enhance Grab Mart’s SKU offerings.

   Notable Quote:
   Brett comments, “Grab’s move into grocery delivery was suspicious initially, but it has successfully increased their SKU count” ([25:24]).

3. Financial Services:

   • Expansion: Transitioned into banking with GrabPay and GXS Bank, offering e-wallets, buy now pay later, smartphone financing, and various loans.
   • Growth Concerns: Rapid expansion into lending poses risks due to limited underwriting history and potential default rates.

   Notable Quote:
   Ryan expresses caution, “New banks growing their loan portfolio rapidly worry me because of the uncertainty in adverse environments” ([35:01]).

---

Competitive Landscape

Uber’s Exit:
Uber sold its Southeast Asian operations to Grab in 2018 for a 27.5% stake in Grab, effectively eliminating one of Grab’s biggest competitors in the region. This acquisition allowed Grab to consolidate its market position and focus on expanding its services without intense price wars.

Sea Limited Comparison:
While Sea Limited's Shopee Food competes in the delivery space, Grab remains a leader in mobility. In financial services, Grab's niche lending products do not significantly overlap with Sea Limited’s offerings.

Notable Quote:
Ryan notes, “Grab is the clear leader with over 90% market share in multiple countries, unlike Sea Limited which primarily focuses on e-commerce” ([47:08]).

---

Financial Performance and Valuation

Current Financials:

• Market Cap: $20.6 billion
• Cash Reserves: $6.1 billion
• Enterprise Value: Approximately $14.5 billion
• EBITDA: $700 million from mobility and deliveries

Growth Projections:

• Mobility GMV: Expected to grow at an average of 10-13% over the next five years.
• Deliveries GMV: Projected to grow between 14-15%.
• EBITDA Conversion: Mobility to maintain 9% of GMV, deliveries aiming for 4%.

Valuation Metrics:

• EV to EBITDA: Currently at 18x trailing numbers.
• Free Cash Flow: Improved to $854 million over the last 12 months, with stock-based compensation stabilizing.

Notable Quotes:
Ryan summarizes, “Purely on the deliveries and mobility side, Grab is trading at eight and a half times 2029’s mobility EBITDA” ([55:37]).
Brett adds, “With $265 million in stock-based compensation over the last 12 months, Grab is demonstrating good spending discipline” ([58:41]).

---

Management Team and Leadership

Anthony Tan – CEO:

• Background: Grew up in Malaysia’s wealthy Tan Chong Motor family, bringing both business acumen and a rebellious spirit to Grab.
• Ownership: Holds 3.7% of shares but controls 63% voting power.
• Leadership Style: Focuses on long-term growth, reducing corporate costs, and expanding service offerings without compromising core operations.

Support from Dara Khosrowshahi:

• Role: Board member and significant shareholder, providing insights from his experience with Uber.
• Impact: Helps Grab navigate competitive strategies and operational efficiencies.

Notable Quote:
Ryan praises, “Anthony Tan and the management team think long term, managing the business for long-run EBITDA and free cash flow growth” ([61:59]).

---

Investment Considerations and Conclusion

Pros:

• Market Leadership: Dominates multiple Southeast Asian markets with substantial user base and high market share.
• Diversified Revenue Streams: Strong presence in mobility, deliveries, and growing financial services.
• Financial Health: Significant cash reserves and improving free cash flow indicate operational efficiency.

Cons:

• Financial Services Risk: Rapid expansion into banking and lending introduces credit risk and challenges outside core competencies.
• Management Focus: Potential overextension by pursuing numerous initiatives simultaneously could dilute focus and resources.
• Economic Dependency: Heavy reliance on growth in developing markets with lower GDP per capita may limit user affordability and expansion potential.

Final Thoughts:
Ryan places Grab Holdings at the top of his watch list, recognizing its robust position in mobility and deliveries while remaining cautious about the financial services segment. Brett concurs, highlighting the company's potential yet underscoring the inherent risks in its diversified approach.

Notable Quote:
Ryan concludes, “Grab is well-positioned to grow volume in mobility and deliveries for years to come, potentially generating significant returns if financial services stabilize” ([62:12]).

---

Recommendation

Hold/Watch:
Given Grab’s dominant market position, diversified segments, and improving financial metrics, it remains a compelling investment in Southeast Asia. However, potential investors should monitor the performance and risk factors associated with its financial services expansion.

---

Subscription and Further Reading:
For an in-depth analysis, detailed financial projections, and additional charts, subscribe to the Chit Chat Stocks newsletter on Substack. The link is available in the podcast's show notes.

---

Disclaimers:
Chit Chat Stocks is not a financial advisory service. All opinions expressed are for informational purposes and should not be taken as investment advice. Always conduct your own research before making investment decisions.

Transcript

[Brett Schaefer]

Welcome to Chitchat Stocks. If you are a regular listener to our show, then you know that we love international investing. I'm guessing you do too. When it comes to international investing, no brokerage compares to Interactive Brokers, otherwise known as ibkr. You can easily trade assets worldwide using a multi currency IBKR account in 160 markets, 36 countries and 28 currencies with low fees. Compare that to your existing brokerage and its limited trading ability and high fees on foreign exchange. There's truly no comparison. Trade stocks, options, futures, currencies and bonds globally with IBKR's unified brokerage platform. I wouldn't use any other brokerage for my investing needs. If you're interested in checking them out for yourself, head on over to ibkr.com restrictions apply. Interactive Brokers is a member of SIPC. Welcome to Chit Chat Stocks. On this show, hosts Ryan Henderson and Brett Schaefer analyze businesses and riff on the world of investing.

[Ryan Henderson]

As a quick reminder, Chitchat Stocks is a CCM Media Group podcast.

[Brett Schaefer]

Anything discussed on Chitchat Stocks by Ryan, Brett or any other podcast guest is not formal advice or recommendation. Now please enjoy this episode. Welcome to another edition of the Chit Chat Stocks podcast. My name is Brett Schaefer and as always joined by Ryan Henderson. Today we have an episode covering a stock research report. A company that is known by, I think a subset of the investment community, but given that it operates in Southeast Asia, it's not known as well among the entire, I guess US or European investor community. And that is Grab Holdings. Ryan did a research report on this one, so I'm going to lead him through the episode, let him go through his notes, what he uncovered on this stock and how the business works, its history and then we'll get to any conclusions and whether he's thinking of buying, what the valuation looks like, all that good stuff. We're going to do a comprehensive report throughout this podcast episode and if you want the written notes, subscribe to our newsletter on substack Chit Chat Stocks. So Ryan Grab holdings, as you have in the title here, the super App Dominating, or we may or may not use that word, but the Super App Dominating Southeast Asia. How did Grab get started?

[Ryan Henderson]

Yeah, Grab really has become what I would call a super app. They have more than 40 million monthly transacting users. I think it's more than 100 million annually and they operate in eight different countries. They are the leading market share provider in most of those countries. For their core operations they were the first ever decacorn so I believe that's $10 billion private valuation out of Southeast Asia. And they are one of the largest companies in the region by market cap. Today we're going to look at how they got here like you just mentioned, and then hopefully I can give some thoughts on whether or not I think their ascent can continue. But Grab was conceived in 2012 by Anthony Tan and Tan Hui Ling for a startup competition at Harvard Business School. So both Anthony Tan and Tan Hui Ling, they were from Malaysia. They connected early on in their time as undergrads at Harvard. Both are actually still a part of the company today. Anthony Tan is the CEO. And Tan Hui Ling, not sure on her exact title, but she's still a pretty big shareholder. And Anthony, Anthony grew up as one of the. As the youngest of three sons in one of Malaysia's wealthiest families. So his grandfather founded Tan Chong Motor, which is apparently a huge multinational auto distributor. And so the plan was he would go off to Harvard Business School and come back and work for the family company. He was going to be rich no matter what. So there wasn't this driving financial motivation like he needed to get out of existing circumstances or anything like that. But. And he talked, he actually talks pretty openly about this because he's like, he calls himself a rebel without a cause. Like there wasn't this dire need to become wealthy. But my guess is that he wanted to establish something of his own. And he actually talks a lot about like parents in Malaysian culture are like constantly sort of like unapproving of like new ventures and new bats. And he was telling his dad who was running Tang Chong Motor about like this, this idea that he was after. And his dad was like, yeah, good luck with that. But you know, I don't want you to bother me with this IDE anymore. Obviously it's been a huge success since, so kudos to him I guess. But anyways, Anthony had attended some conference while studying at Harvard that made him think about the potential that Ride Hate Lane services could have in Southeast asia. This was 2010 to 2012 time period. So I believe Uber had just kind of launched if I'm not mistaken. I think that was like 2008 was Uber's launch. Brett, maybe you can factor would have.

[Brett Schaefer]

Been Later, I believe 2011 when this. Because the app store would have had to been up and running.

[Ryan Henderson]

That's right.

[Brett Schaefer]

More popular on. On iPhones.

[Ryan Henderson]

Anyway, he. He attended some conference where it sparked the idea of ride hailing potential initially in North America, but he thought it could be applied to Southeast Asia as well. And he and Tan Hui Ling talked about the idea frequently. And apparently one of the biggest issues at the time with the taxi system in Southeast Asia was actually safety, particularly for women. So I think listeners and readers can probably imagine the types of issues that happened here. And in fact, it was such a big problem. Tan Hui Ling, who is female, she, she shares this story where she was working for McKinsey in Malaysia. She would have some late nights. She would take a late night taxi ride home. And she recalls having to pretend to be on the phone the whole time just so drivers knew that she could like report issues immediately if, if they decided not to like, take her where she was supposed to go or whatever. So they, they knew there had to be a better system for this. So the idea they conceived was called My Taxi T E K S I It's, it's changed over time, but that was the Malaysian pronunciation for it. And this was a novel concept in Malaysia at the time. It was a mobile app with GPS enhancements that connected passengers with nearby taxis. The big unlock here for women especially was the trip was being tracked by gps, which made them feel much safer. This concept won first runner up at the Harvard Business School startup competition and they received $25,000 as seed funding to help start the business. So the value proposition from the consumer's perspective was obvious, right? You were getting rides on demand that were much safer and, and obviously meant that a lot of people were, were interested in the app from the consumer side. But the hard part was getting taxi drivers on board. So I thought this was actually an interesting snippet from an interview with Anthony Tan. The interview says to get drivers on board. In the early days, Tan was on the ground traveling across Southeast Asia trying to convince taxi workers to dry grab. Tan noticed that before starting their shift in the morning, drivers in Ho Chi Minh City, Vietnam would stop at a gas station to drink coffee. So he would show up at around 4am, give out free coffee to the taxi drivers, which is also when he pitched them to join Grab. Nice little hustle story from a CEO in the early days, but that was the expansion model get taxi drivers to offer to, to put themselves up on mytexi.com they didn't have to be exclusive with my taxi or anything like that, but it allowed them to get greater supply of rides because people were looking for them and people were more confident in it as well. So they, they, it really boosted supply for them. They were early to the business model in Southeast Asia. So this really helped with adoption, which in turn helped with Funding. And all in all, they have now raised 27 different funding rounds, including a Series H. That might be the highest I've ever seen.

[Brett Schaefer]

Yeah, could be. Could be a record there. They were a Silicon Valley favorite, raising money from some of the large funds, some of the crossover funds that take people into public markets. As we saw with the history of Uber and the competition there. It was a very cutthroat industry at the start, but. And we'll get through some of the competitive dynamics today later. Let's go through what the business looks like today. You called it a super app or a budding super app. They're trying to do a lot of things for Southeast Asian consumers. What are these segments, what matters and what are their growth trajectories like?

[Ryan Henderson]

Yeah, and let me be the first to say I was skeptical coming into the research for this because the. They went public via spac, which has kind of become a dirty word. They raised 27 private rounds. Well, actually the pri. The 27 rounds includes their spac. But they. Some of these heavily funded private companies tend to have a attract customers at whatever cost attitude, which I don't always resonate with as public market investor. But today the business model has really evolved and the management team seems to have the right focus in terms of long term metrics that matter. But let's go through the business model a little bit more on the history real quick. In 2013, my taxi rebranded to Grab Taxi. And in 2016 they shortened the name to just Grab. The shift away from Grab Taxi to Grab was primarily not because they were offering other services, but the types of vehicles that were being offered on Grab were changing. So when it was Grab Taxi, it was like you were getting a taxi. When they finally shifted to Grab, there was motorcycles, there were private cars that weren't associated with any sort of taxi organization. There were carpools. It was really evolving to a lot of different ride types. So they decided to shift to Grab today. Those vehicles, the motorcycles, private cars, even taxis, are still a core component of Grab's mobility segment. But the business has diversified into other services which we're going to talk about today. You can genuinely think of Grab as a combination of Uber, Door Dash and Instacart in one app. And that's. I'm leaving their financial services segment out of it because there's like a million analogies you could have thrown in there. But for. For the core mobility and delivery services, you can think of it as Uber and DoorDash and Instacart for the Southeast Asian market. And I break the business into three segments. There's mobility. Well, I don't break it. The management team breaks into three segments. There's Mobility, deliveries and financial services. I'm going to kick things off with Mobility. This is their largest contributor to earnings and it's very comparable to Uber in terms of how the app functions. So this isn't some novel concept people have. It's pretty easy to explain. There's this massive supply of drivers in each market. More than 5 million driver partners in total. In a couple of their markets, they are the largest employer and they like single handedly impacted the employment rate in some of these countries or the unemployment rate. And users can select from a variety of on demand ride types. So there's Grab Car, Grab Car xl. There's, you know, think of your experience on Uber, it's very similar. There's Grab Taxi, which is like metered pricing, but there's also the Grab Bike, which is very popular as a mode of transportation in Southeast Asia. So it was kind of good that they got to that early.

[Brett Schaefer]

And it's for anyone that's. For anyone that's curious on how this works in say, poorer areas of the world, you can literally buy taxi where you just hop on the back of a moped for about 50 cents. So not sure that. Right. It's the safest mode of transportation, but it is an option out there that is quite popular.

[Ryan Henderson]

Right. And it's, yeah, it seems like a funny thing for people in North America, myself included, to just hop on the back of a bike. But when you're weaving through busy cities and you don't have that far to go, but you would prefer a bike ride as opposed to walking, it can be kind of a quicker form of transportation. One big distinction though between Grab and Southeast Asia broadly versus their North American counterparts like Uber, is that grabs driver partners. It's really common for them to actually rent or buy a vehicle from Grab. So this is an option in America. But that's not usually what you experience. Usually when you get an Uber in the United States, it's someone's personal car. They own it, they insure it, they take care of it, and they use it for rideshare sharing. This leads to a pretty wide variety of car models that a rider will experience. So I mean you, you see it all the time. You book an Uber, it could be any, really could be any car. And lately it feels like the quality of those cars has been a little poor. But that's kind of a personal gripe for me. For Grab, depending on the particular market, they actually have pretty strong control over the vehicle fleet. So Grab partners with auto companies like byd, Hyundai and others and either buys or leases a fleet of vehicles that they then rent out or even sell to partners. So right now they're really promoting electric vehicles and you see them talk about this all the time on their conference calls. This electric vehicles in particular has a couple of benefits for Grab. One, evs are cheaper and it's actually becomes a revenue driver for them. So when the vehicle is a part of the quote Grab fleet, Grab is actually the ones often paying for the charging and the maintenance of the vehicle. And to kind of save some costs here, they have massive commercial charging partnerships. They offer vehicles that are the same. They, their fleet is typically vehicles that are the same make model. So servicing them is easier and cheaper. And they can price this into the drivers who are renting from them. And it allows driver supply to grow really quickly because by offering the vehicles, drivers have less upfront cost to get started, which means Grab can get more supply. More supply means lower prices, lower prices means more rides and so on. So it's kind of this nice feedback loop. Basically it's allowing people that wouldn't become drivers to make this one of, if not their biggest gig work or their biggest sort of employment service. And by controlling the fleet, there's actually a lot Grab can do to improve drive ride volumes and margins. So they have a lot of margin control by these, these partnerships with different automakers and vehicle makers. And you see this, this is actually pretty common apparently where come like individuals will take out a loan from Grab and this kind of leads into the financial services segment. They'll take out a loan for a bike from Grab. They'll then once they're paying that off, they'll get two more bikes from Grab. They'll give them to two of their friends and have them start driving and paying them off, if that makes sense. So it's like people are kind of building businesses around this by renting or taking out loans for bikes from Grab for this segment. Overall, this isn't like they're not some niche provider here. Grab is the clear leader in the space in Southeast Asia. They've got 97% market share in Malaysia, 91% in the Philippines, 85% in Thailand, 67% in Vietnam. Some of these numbers might be slightly outdated, but they are the leading market share provider. The only core market for them where it's still competitive is Indonesia. Now this is the largest market in Southeast Asia. So Indonesia for reference has 275 million people. All of Southeast Asia has about 650 million. And they split the Indonesian market pretty much 5050 with a company called Gojek which is ride sharing plus food delivery. And the parent company is called Go to and they're actually, the rumors are Grab is looking to acquire Goto, the parent company here. They just raised a $1.2 billion convertible note which does make it look like they're pulling together financing to make this deal happen. They have denied that the deal is going to happen, but it would make sense that they go after it because this would really consolidate all market share and give them tons of power in pretty much all of their markets. And they, they have done a similar deal to this, which I'll talk about in a second. But really they would be like the only player in town in Indonesia if that were to happen. To put some numbers on grabs mobility segment. Over the last 12 months they have generated $1.1 billion in revenue. I believe it's around like 6 or so billion in GMV gross merchandise value. Let me double check that. Yeah, 6.9 billion in 2024 in GMV and they've got 55% EBITDA margins from this segment. I mean you think about it's just a take rate, right? So, so the revenue is kind of misleading here, but it's Basically I believe 9% of their, their GMV gets converted into EBITDA dollars for that segment. So I'll leave it there. Thoughts on the mobility segment overall? Any questions?

[Brett Schaefer]

Brett, it makes sense that they're financing stuff with them. I guess it gives them a larger piece of the pie. Maybe that could lead them to some financial liabilities down the road if they're not smart about this. But they do have the balance sheet to absorb that and kind of grow with the business if need be. It doesn't seem to be a problem yet for anyone that understands the Uber Lyft business. I, I don't think this is one that's hard to comprehend. You still have the similar take rate model. It's technically outside of that other thing they do with the financing. Pretty asset light. You just build the marketplace and get your cut. As you mentioned, 9% of GMV. My question is what is the. Do you know what the penetration is across these countries compared to the traditional taxi market? How large are the addressable markets in these nations? Are they way behind, for example United States or China when it comes to ride sharing apps? Because that would give me since it's really hard know, you know these lower GDP per capita countries it's, it's different to I don't know just from where I live and where to understand how big of a potential market this is before they, you know, try to move into adjacent opportunities.

[Ryan Henderson]

Sound the alarms. New Sponsor Alert. This episode is brought to you by TSOH Investment Research. TSOH is run by recurring guest and friend of ours Alex Morris. Inside his research service, subscribers get access to 6 high quality stock research reports per month including initiation reports as well as regular updates on current TSOH holdings and watch list stocks. Plus there is 100 portfolio transparency on the service. This coverage includes companies like Airbnb, Celsius, Roblox, Netflix and many others. TSOH is a premium research service. If you are serious about investing this is like outsourcing. A professional analyst, we read his write ups every every week and to be totally honest I lean on him for quarterly coverage on many of the stocks I own. If you are interested head on over to the science of hitting dot com. The link is in the description. Again that is the science of hitting dot com. I don't have exact figures for grab versus like the taxi system but they report they've gotten to basically 44 million monthly transacting users. The overall Southeast Asian pie is 650 million roughly.

[Brett Schaefer]

Total population.

[Ryan Henderson]

Yeah. And digital penetration overall is not as high as North America. And you actually see that sometimes. We're going to talk about this in a second. Like they'll provide smartphone financing to get drivers on basically using their apps. So it's everything I've seen says that there's a lot of room to grow overall like awareness for this type of service and grow the people that are regularly on it. And they've been really, really pushing towards lower cost rides to make it more accessible to everyone. You see this with now I think a third of their they have they offer like saver fare which is like the cheapest possible ride and that's become now a third I think of their, their booked rides. So they talk about this like basically we're willing to sacrifice margins in the short term to get more people using the service and they really, they want to be a lower cost provider. They want to lower their prices as much as they can by increasing supply so that they can get more and more people using the service. The affordability is part of the what what's holding them back from I think increasing their transacting users is just whether or not people can afford to take regular rides every day.

[Brett Schaefer]

100 that would be my One concern is if you're looking at say 40 million users across Southeast Asia, I would ask, given that, and I just kind of looked it up as we were talking here, the GDP per capita of these countries. You have indonesia just under 5,000. Thailand actually I think probably the highest at 7,000 per year. Are there that many people over, you know, with say an existing Uber type service that over how many people, over 40 million could technically afford this on a regular basis and be a valuable customer? So I guess I understand why they're going into these areas, but doesn't mean that not everyone uses Uber or Lyft or what have you in all these markets. Let's go through some of the other services though, what they're adding on here to try to expand their total addressable pie. And the first one you have here is delivery.

[Ryan Henderson]

Yeah, Grab delivery is similar to doordash and Instacart for those in North America that use those services. Basically users can buy food or items from restaurants and grocery stores and a driver will pick those items up. The market here is large. It's bigger than mobility in terms of like overall gmv, as you'd probably assume. There's, I mean, you're buying food in addition to actually delivery services. And Grab is the number one player in all of their markets except for Vietnam where it's number two. And I think there's kind of a local company there that's, that's done pretty well, but they're still growing share overall and beyond, just taking a cut for facilitating these transactions. Grab has actually become pretty involved with the merchant side of things. So they offer a variety of financial services to like when you hear them talk about the delivery segment, they talk about onboarding merchants. They really want to get as many merchants on online as they can so that they can increase instead of ride supply. They're increasing like the SKU count, the number of items on there, the number of different meal types on there. And so they offer services to them. There's like working capital loans for merchants. They offer invoice financing. I think they even have a point of sale system as well. That and then the other element here is they actually got into the merchant side of things themselves. So in 2021, Grab acquired Jaya Grocery, which was a large supermarket chain in Malaysia, and they've acquired some smaller chains, some smaller chains since to help expand Chaya's footprint.

[Brett Schaefer]

What do you think of this? I don't like. I don't like it at all. Yeah, yeah.

[Ryan Henderson]

I was certainly suspicious looking at this early on my guess is that they did this to increase SKUs available on Grab. Like maybe they weren't getting enough merchant supply for this to really work. So by buying Giant Grocery which isn't like it's not some massive chain but it was like 40 plus convenience stores initially. So it's not like completely affecting their business model I guess in like their financial statements aren't totally different but it did increase the number of SKUs and so far it seems to have worked. In terms of delivery, GMV can has grown at a really solid pace. Today they generate far more. They generate twice as much GMV from deliveries as they do from mobility and it did not used to be the case. That wasn't the case previously. And I am pretty skeptical anytime a tech company gets into grocery. But it seems like this helped increase the amount of supply on their delivery business, especially Grab Mart which is their like grocery service. Hard to say, they say positive things about it every quarter. But yeah, I would be a little hesitant. It's nice for them to start the service this way, like increase supply. They have to do it inorganically because they weren't able to go out and get enough merchant partners in the early days. But I don't necessarily want to see them continue like investing in this heavily I guess would be. My worry is I don't want to see them become a grocery business overall. I want to see them continue to be a take rate business primarily. But so far the results have gotten, they've gotten really good in the deliveries overall. So today deliveries is grabs largest segment by revenue and they have turned the corner to profitability pretty quickly. So in 2022 they had negative 54% EBITDA margins. Today it's positive 14% and long term management expects to convert 4% of their GMV in deliveries into EBITDA. I think right now it's at like 1.8%. Side note, advertising is a big business for them all over the place. So they have different places where they can advertise throughout the app and especially on the delivery side of things. So here's a quote from the last conference call. It says advertising revenue as a percentage of deliveries. GMV continues to expand in the first quarter to 1.7% from 1.3% in the prior year. That's I mean that advertising revenue is very low cost. So it's going to be a huge profit driver for them if they can continue to increase that. And they continue to talk about basically like we're generating really good return on ads for our merchant Partners, which makes sense. I mean, we, we talked about this with Instacart. Like, if you're a grocery store, you want to offload some inventory, throw out some major discounts on a service provider like this, like Instacart or Grab Mart, and you're getting right in front of customers. And it's really a perfect place to advertise because, you know, it's a captive audience. And so I suspect that advertising penetration as a percentage of GMV will continue to rise. And that should help them get to that 4% target would be my guess.

[Brett Schaefer]

In these countries where there's at least, I think no expert on it, but where there's larger levels of income inequality compared to say, the United States or Western Europe, which for anyone that doesn't know, it's hugely misleading that the US has giant income inequality. But that's besides the point. In these markets, these type of businesses, which is food and grocery delivery, can work much better because there's a lot of people that are interested and it gets them higher incomes to become drivers. And there's also a lot of people on the other side of the marketplace that can afford these services. So seems like a promising business. Not surprised that it is profitable on doing well, I guess. Instacart and DoorDash, actually, I'm not sure if doordash is profitable, but it seems like they're doing almost better than some of these other ones. And again, it makes sense. You have the huge fleet of moped drivers that can drive around to deliver this stuff to people.

[Ryan Henderson]

Yeah. I think generally when you're just such a market share leader, there's a lot you can do, a lot of levers you can pull to A, increase margins, but also B, like take margins down if you want to, to increase volume. Like we talked about, the saver fares. Saver fares are especially popular with deliveries. They can become. In the early days, you don't want to be just, well, even though they did this, they were really subsidizing rides just to get people on the app. Now they can kind of pull that lever again and not have the concern of, okay, I'm going to lose out to competition. Like if they want to, in, if they want to decrease prices or, or, or cut margins on certain drive or ride types, they know it's going to be likely accretive to volumes overall.

[Brett Schaefer]

Makes sense. Okay, what is the third pillar and what are your thoughts? And this seems to be a little different than the Uber and Doordashes of the world. So maybe we have to go through on kind of exploring whether this is a good business model for them.

[Ryan Henderson]

Yeah, so financial services, this is, there's a lot to unpack here. But this was actually similar to why they started ride sharing in the first place. Where Grab initially got into financial services for safety reasons apparently in the early days drivers were often paid in cash. And I'll also mention that overall these are still heavily cash based societies. I don't know the exact split, but it's. You don't see as much like card or digital payments penetration as you do in, in more developed or western markets. So that might bode well for them in terms of like just an overall tailwind for financial services. But so drivers would hold a bunch of cash basically in the early days, usually it was a day's worth of cash because they're making all these rides, they don't have time to go put it in their safe or whatever. And so this made them, as you can imagine, easy targets for theft. So Grab launched Grab Pay. I don't remember what year this was, but it allowed for cashless transactions and this actually was sort of the spark that led them into the payments world. So while it started as a simple rider to driver, Payments Grab has moved into a whole world of financial services that I'm going to talk through. I cannot go through all of these in a single hour long podcast in any depth. So I'm going to name some of them and then we can talk about what I think is important. So Grab offers E Wallet, a rewards program, Grab Pay card, Buy now, pay later, Smartphone financing, Driver cash loan slash incentives, advances, merchant working capital loans, merchant invoice financing, driver insurance, consumer insurance, cash management and now they've become like a full blown bank, which we'll talk about in a second too. I'm probably missing something in there as well, but the three categories that I think are the most important here are payments, banking and lending. So the payments business is fairly straightforward. GrabPay can either function as a prepaid wallet where you load money onto it, or just as a pass through payment method where it's linked to like a credit or debit card, they offer rewards on it too. So if you, if you are like a regular user of Grab and you constantly buy deliveries or you constantly take rides, it makes Sense to use GrabPay for this. And as you might assume, Grabpay just takes a small fee from each transaction. And then on the banking and lending side, this is where I start to get a little hesitant. So they are turning into a full fledged bank in 2020 they got a digital banking license in Singapore through a partnership with Singtel. And then through that same, I think it's the joint venture, they got a banking license in Malaysia under the name GXS Bank. So far on the deposit side things look really good. This quarter they reached $1.4 billion in customer deposits which is up from 479 million last year. So they've tripled deposits in a year largely because they're leveraging the grab ecosystem and they can say like they can do high interest cash accounts through GS GXS bank and they can promote that on grab and all. There's you know, all the different kind of cross sell stuff you can do with consumers. But here's where I hesitate. They have grown their total loan portfolio from $196 million to $566 million in two years. And this portfolio is full of all different types of loans like the ones I mentioned above. There's the smartphone financing, the merchant loans that they provide. There's loans for motorcycles, to drivers, there's the list goes on and on. They provide a number of different longer term loans as well as micro loans. Now they do give us the sort of standard context around it. So one quote from the last conference call was we continued to maintain a prudent stance on credit risk with 90 days non performing loans within our risk appetite.

[Brett Schaefer]

That's useless information. That's useless.

[Ryan Henderson]

I don't, yeah it is.

[Brett Schaefer]

Doesn't say anything.

[Ryan Henderson]

What's your credit risk appetite? And also it's like it's a lagging indicator, right? I mean when things are always things can be good for a bank until they aren't right? Like if you get some sort of a big recession or a really difficult interest rate environment or something drastically changes like how do those loans perform? I really have no idea. And that's where I get really cautious is new banks. And by new banks I'm I mean N e w not like new bank, the Latin American company. New banks that are growing their loan portfolio really really quickly. It worries me because it's like how much history of underwriting do they have? Like how much experience in the underwriting segment do they have? Have they endured any sort of big event in, in the past to know whether or not these, these loans will hold up in an adverse environment? So A it's frustrating just because I don't know what this is going to look like in five years and B analyzing a bank is very different that analyze in a tech company especially like a ride sharing app It's. And maybe that's why so many people just kind of have discarded Grab as throwing it in the too hard pile. But I just, yeah, throws a wrench in things because there's a lot of uncertainty around operating a new bank, especially.

[Brett Schaefer]

In economies we've never been to. We don't know much about the consumer landscape, what's going on on the ground. It's is one thing to invest in a bank in the United States or the country where you're from, but investing in one internationally, that's something that, I mean, I think it. Banks are my favorite type of thing to invest in. Even in my home market. Going abroad, that is much tougher than analyzing. Oh, they have a lot of users, a lot of gmv, they're doing advertisements and what have you. That's easy to understand. And you can kind of go, oh well through the market cycle. That should be fine. It's an asset light business to a point. Although they're doing, you know, buying the vehicles and buying these grocery stores, which is kind of another thing that you add in there. Now, I. Ryan, or what do you want to add there, sir?

[Ryan Henderson]

I will say they maybe have a leg up relative to some other lenders in that they have clear visibility into how much some of their borrowers make. Right. They can see, okay, this guy does eight rides a day at this price. Here's how much he's making, here's how much he could potentially pay out. And I think they actually have like, I'm not 100% on this, but I believe they can just deduct it from their bookings from the day. Like they can deduct the. They can basically make it auto payment. So if someone's got a loan out on a bike from Grab and they're doing 20 rides a day, maybe a certain percentage of that volume every day goes straight to the loan. However, that doesn't mean these, these loans are bulletproof.

[Brett Schaefer]

Yeah, yeah. It's just a lot of stuff. So the question is, and you wrote it in here, is Grab holdings trying to do too much?

[Ryan Henderson]

All right, folks, if you are a regular listener to chit chat stocks, then you know that we use Fiscal AI, formerly known as FinChat Daily. Fiscal AI is our complete stock research terminal. It's where we have our investment dashboards. It's where we create financial charts. It's where I read all the transcripts for conference calls, sell side events, shareholder meetings, and it has Morningstar's high quality reports on more than 1700 companies. It really is the complete research platform for stock focused investors. If you use our link Fiskel AI chitchat, you will automatically get two weeks of fiscal Pro for free. And if you find that it's worth upgrading, which I think you will, you'll get 15% off any paid plans with our link. Again, that is fiscal AI chitchat. The link will be in the show Notes My gut says yes, they are trying to do too much and I'm a big believer that for public companies focus really matters and that when a company starts to spray its people and resources across too many bets, it can lead to, I mean sometimes it can lead to degradation of the core service and it can make it even confusing for consumers. But the other concern is that it's just wasted expenses. They are not giving their all to every small bet that they have here. And so it a lot of them are going to end up being money losers. However, I will caveat that by mentioning that most of these bets, not all, but most are solving existing problems for their current customers. So let's take smartphone smartphone financing as an example. By helping potential drivers buy a phone, grab is able to attract more drivers who can then offer more rides and use more grab services such as Grab Pay. And this helps also give a read to the credit worthiness of those drivers for other lending products potentially down the road. So that to me isn't them just going after a new market purely for like expanding the tam. It's just solving clear problems that help grow the rest of the grab business. Not all of their other bets I would describe as that. But, but most of them feel like logical next steps. My only cons it would be one thing if they were just doing this with a banking partner, like not taking on the credit risk themselves. But you know they, they are. I mean they want to become a bank. You've seen that with their, their banking licenses that they've acquired. So yes, I do feel like it's maybe taking away some focus of other services, but I haven't seen any sort of lapse in quality or performance from the other divisions. And they seem to think that they can get profitable by the second half of next year. If you're a shareholder, I think you really got to hold them to that.

[Brett Schaefer]

Yeah. And if again I know the Latin American market more but if there is an opportunity to build a neobank in some of these Southeast Asian countries, maybe that is a huge market opportunity for them. The thing is it's, it's just risky. It's two different core competencies and they overlap a Bit, but I would say more of that for the payments. 1. Yeah, it would be interesting if they could partner with a bank that has experience lending over long periods of time. But that leads us here to. You talked a little bit about competition, but the competition and the overlapping stuff here with and the two companies that come to mind. I know you mentioned one in the title here, Uber. What happened to Uber in these places that they tried their international expansion and how much because I know this is very popular stock. How much do they overlap or not with Sea Limited?

[Ryan Henderson]

Let's start with Uber. So why didn't Uber win in these markets? It wasn't for a lack of effort on Uber's part. They invested heavily to try and win in the all the Southeast Asian markets if I remember correctly. And they actually had gained pretty good traction using a similar model to what they had in North America, which was constant customer incentives. And by 2018 Uber was oper operating ride hailing services in eight different countries and they were operating Uber Eats in three of them. However, they still didn't have a dominant position in most of these markets the way that they did in like North America for example, partly because of the success of Grab. But they were in price wars like they were. It was back to those like VC backed days where you would get like free rides from Uber all the time, free meals from Doordash. You remember those as consumers it was, they were in a price war and an incentive war with Grab. And if you think back to that time for Uber as well, it was a bit of a transitional period for the company. So Kalanick had stepped down as CEO, Dara had taken over the company was Uber specifically and Grab was hemorrhaging money and they were planning to go public. So I think Dara really wanted to clean up their financials and kind of reign in the focus. But also Softbank and Didi were major investors in both companies and they say they didn't have any involvement in a transaction that I'm about to talk about, but I think they probably did and they didn't want these endless price wars between two of their own portfolio companies. So in March of 2018, Uber sold their Southeast Asian ride hailing and food delivery options to Grab in exchange for a 27.5% stake in the business. This ended up working out really well for Grab and Uber I guess since they still hold the stake and it's valued at 2.6 billion Uber's equity stake. But it worked out for Grab for a couple of reasons. So one, this took out One of their biggest ride hailing competitors, they gave riders and drivers a two week notice that the Uber app would be shutting down and encouraged them to move over to Grab. So they likely gained a ton of drivers in the process, greatly expanding their supply and they'd no longer be fighting a price war with their richest competitor. 2 this was actually their entrance into the food delivery space, which as we're going to talk about here in a second, I think it could potentially become their biggest profit driver in the coming years. So prior to this, Grab didn't have any food delivery presence whatsoever. So when this deal was getting set up, they started to build out a separate app called Grab Food. Grab preloaded merchant data into the system and started automatically migrating all the restaurants and delivery partners from Uber Eats over to Grab Food and then continuously prompted Uber Eats customers to download Grab Food instead of. This to me was a huge step for in grabs progress. Anytime you can take out your biggest competitor, you're going to consolidate a whole bunch of market share. So this really changed the economics for the business in a big way. They're no longer needing to fight these price wars with the richest competitor. You have seen the margin inflection in their different business lines since this time. And when you look country by country across deliveries, market share, mobility, market share, it's gone from this constant battle to Grab being the winner in I think pretty much seven out of eight of their markets for both segments. And it's just had a massive impact on their financial statements.

[Brett Schaefer]

Yeah, the biggest positive I think for this company is the fact that in the core delivery and mobility space they've turned into a monopoly in these areas. And I think the downside is one, you mentioned the risk of going to financial services and just the unknowns for investors. But two, just adding on some of these other things like the grocery stores and things that kind of makes you go, what are they going to reinvest in? There's just some questions there. Now. What about Sea Limited? They're overlapping, I would think with the financial services, but is there any E commerce overlap? Because at its core you're, they're almost somewhat similar where they're trying to get people to buy stuff from them and use their financial, you know, personal finance products.

[Ryan Henderson]

Yeah. So I know they overlap specifically with Shopee Food. I'm not sure on the market share split on all of the market share charts I saw, which some of them were outdated. Grab was the leader relative to Shopee for deliveries, specifically mobility. It's. I don't think there's any overlap with.

[Brett Schaefer]

C, it seems like they've found them off pretty well. But financial services, maybe it's it from what I remember see is bigger.

[Ryan Henderson]

Yeah, the other part is like, I mean financial services is massive and I don't know how much Shopee and Grab over or sorry, C Limited and Grab overlap specifically with some of the loan types that Grab offers like loans for bikes and I don't know, like merchant invoice financing. Like maybe there's some overlap on some of the broader categories. But my guess is that for the specific lending niches where Grab is operating, I, I would guess C isn't a big competitor. But I, I honestly I, I don't keep up. I didn't, I didn't do a dual research report here and look at C enough. So C is a much bigger company. Overall I think it's five times the market cap roughly. But yeah, I believe most of C's business is just general E commerce, which isn't really what Grab's going after.

[Brett Schaefer]

The one yeah, with competition the one thing you just worry about is someone entering from another area. You have the Chinese players, you could have probably not Amazon at this point, but you could have someone like Coupang trying to enter into there. It seems like Grab has a big enough scale now, but that would be the one thing with their quote unquote monopolies within this market. You could see say in a Singapore or some other area, an outsider coming in and saying, well we kind of hit maturity in our area and we'd like to throw money at this one. I'd be fairly confident that Grab would hold off just because they had the local expertise, but that's probably the one thing to worry about competition wise. Let's talk financials though. How did you do the valuation work? What are you looking at and what were your forward projections?

[Ryan Henderson]

Yeah, the valuation was honestly a little messy because it's hard to like, you kind of have to work backwards from like GMV assumptions and then the bank kind of throws like just a big wrench in it as well. So for quick numbers, Grab has a market cap of $20.6 billion. They have $6.1 billion sitting in cash and short term investments on the balance sheet, which I might also add seems a little high, but I guess it's better than them totally wasting it on, on needless initiatives. But yeah, $6.1 billion in cash on the balance sheet. They had a huge spac, so I'm, I'm assuming that was a big contributor there. So the enterprise value is roughly 14 and a half billion dollars. Over the last 12 months they earned $700 million in segment adjusted EBITDA. Pause, pause, pause, pause. I see Brett's smirk there. We will talk sort of normal EBITDA which should have good conversion to like real cash flow, but so face Multiple is an EV to segment adjusted EBITDA of 18 times trailing numbers. The questions I'm thinking about for the valuation are 1. How much GMV will grab generate from mobility and deliveries in five years? 2. What percentage of that GMV will turn into EBITDA? 3 How much EBITDA will convert to real earnings, which kudos to them because they actually split out like they do segment level adjust EBITDA and then they have like corporate costs, like overall corporate costs. They actually break out as a line item and they've been very, they've been reducing that actually like not reducing it as a percentage, but just straight up. I think it's down like 15%. Corporate costs are overall over the last two years. And then the last one is what is the financial services business worth? Which is really hard for me to tell. But I have a little projections sheet if you're interested in looking at the specific numbers. You can check out our sub stack and it's totally free. It'll be up there, but I'm not going to do all the math here on the podcast I will talk over some of what I think are the big drivers. So my take is that I think they are really well positioned to grow volume in mobility and deliveries this year. Management's implied guidance expects mobility GMV to grow somewhere between 17% and 20%. Deliveries is expected to grow 15% to 17% percent. I think the growth rate will come down for both over time, especially mobility where they're already like the mature player. But there's a, like I said, there's a lot of levers they can pull to increase the amount of riders. Like they can offer consumer incentives, get people on board and then there isn't really that much competitive or competition in a lot of these markets. So it's like anyone that becomes a frequent writer is probably going to be sticking around with grab. They can offer like different ride types, saver fares, that kind of thing. The by reducing the fleet expenses with electric vehicles, they can reduce the cost to serve rides. So they're really going a layer deeper now at this point in terms of how can they get more riders on the service. I assume GMV for mobility will grow at an average rate of 13% over the next five years, I expect it'll be somewhere more like 10% in five years. Who knows? Honestly, it's impossible to assume. But my guess is that mid teens or sorry, low teens seems reasonable as an average. Deliveries I think will be slightly higher, 14% to 15% just because there's a lot more room to grow in that market and a lot of different levers they can pull and they actually, they should see more margin expansion there as well. So in terms of the profit margins management expects on the mobility ride sharing side, they expect 9% of G of V to convert to EBITDA. Right now it's basically at 9% and some quarters it'll be lower, some quarters it'll be higher. And management has talked about, look, we're, we don't care about short term margins, we care about long term EBITDA and free cash flow and getting people on the service is the step towards doing that. So either way, I think 9% is reasonable for deliveries. They expect 4% of GMV to convert to EBITDA. I don't see any reason why that isn't possible. They're at 1.8% today and they've turned the corner really quickly in terms of operating leverage there. So 4% seems reasonable. All in all, I expect mobility and deliveries to produce $2.1 billion in segment level EBITDA in 2029. I really don't think corporate costs will grow that much. They were down, I think it was like 13% this quarter. They've made it very much a priority to reduce corporate costs. Maybe it'll grow a little bit. So I have it growing at basically 2% a year from now until 2029. So I know that was a lot of numbers. Here's my final thing that's worth tracking. Between mobility and deliveries, I think they will do $1.7 billion in normal EBITDA in 2029. Today they have an enterprise value of 14.5 billion. So that would mean they're trading at eight and a half times 2029's mobility.

[Brett Schaefer]

And deliveries EBITDA, assuming this is assuming financial services, no value.

[Ryan Henderson]

Exactly. And that's, that's basically what I pegged it at. I don't know what valuation to give it because so far they are, you.

[Brett Schaefer]

Know.

[Ryan Henderson]

Honestly I think it's pretty cheap. May be reasonably valued for a very high quality business in Southeast Asia. On the deliveries and mobility side of things, the bank and the financial services, broadly they expect to be cash flow positive next year, like second half of next year. And if they're if they just continue to be profitable from that point on, like yes, this is. There's some real value there and it could be really big. I could be totally underestimating this business. It could be like looking at Amazon in 2010 and chalking up no value to AWS. But I don't know what it's worth. It could also lose money. So I'm just kind of writing it off, just giving it like what do I think the deliveries and mobility segment is worth independently? And then what is the bank worth? And I would say it's. It's at a reasonable valuation. Purely on the deliveries and mobility side.

[Brett Schaefer]

The I know listeners are probably asking what's the stock based compensation like? I wanted to pull up this chart from our friends at Fiscal AI Remember if you want these type of charts, use our link in the show notes get 15% off any paid plan. $265 million in stock based compensation over the last 12 months. So that's not going to totally wipe out earnings. It's at a fairly reasonable level, I would say. And the development versus that And I know you just talked about financial services so perhaps free cash flow isn't perfect here but maybe you can correct me if I'm wrong. If we go back to 2022, they were doing 448 million in stock based compensation and they had negative 1.5 billion free cash flow. By 2023 they were break even free cash flow and had 300 million in stock based comp. And then today it has fallen. So they've scaled up with I think and looking at their corporate costs as well. The. I think that's showing some good spending discipline as opposed to a lot of other technology companies. But we're at 860 or sorry 854 million in free cash flow over the last 12 months. Pretty good developments there. We're seeing the operating leverage and Yep, just under 2029 earnings. Seems. What is that four years from now? Yeah, it's not. It's good. It's not dirt. I would say it's reasonable. I looked at another metric which I think is EV to gross profit. I won't show the chart but I think they're at about 12, which is also okay, I would say not dirt cheap. But you really, you're definitely put in a position where you have to make some assumptions on future growth. You can't go, we'll still make money if growth goes away completely.

[Ryan Henderson]

Yeah. I'm not sure how useful gross profit is just given that it's like the, the conversions to EBITDA are really high in mobility at the moment and I suspect revenue to EBITDA will be pretty high in deliveries if they get to that 4% figure that they've talked about. But yeah, it's you, you have to believe that this business is going to grow for sure. There's no. If growth stops, this is. You're probably going to lose money, but I don't see why that would happen.

[Brett Schaefer]

Okay. One of our three pillars of investing is the management team. What do you think of management? And the founder, Anthony Ton.

[Ryan Henderson]

Yeah, I like Anthony. He, he doesn't do a lot of press. I tried to look for podcast interviews and stuff like that and there really isn't a lot out there. I, I would say he's seems like a good CEO. He's managed the business really well so far. He's in his prime, I would think, 43 years old and, and he's been running the company for I guess 13 years. So I don't think he's probably too fatigued as the CEO yet. He owns 3.7% of the shares outstanding and has 63% of the voting power. So this is his company. Really the big thing for me is that Anthony Tan and the rest of the management team, broadly, they do genuinely seem to think long term and manage the business less for short term margin optimization and more for long run EBITDA and free cash flow growth. One good example of that is the Saver Ride. So I already mentioned this, but they launched the Saver Rides. They continuously promote Saver rides in the app and so far it's been a big success. It accounts for one third of delivery rides and 26% of mobility rides. These are lower margin transactions, but it opens up the amount of people who are able to use the service. The other thing, I didn't jot this down, but Dara Kosrashahi, I believe is the way you pronounce his last name. Yeah, with a crazy CEO, he's on the board, they own. I think they might be the biggest shareholder actually of Grab. That's a great person to have on your team and as an advisor, given how well like any sort of best practices from Uber, he has all the incentive in the world to share it with Grab. He's not going to compete with them. He's on the board. It helps their equity investment. So I think that's a good guy to have in your corner. I like Anthony Tan and so far for a company, they've honestly been a lot like Uber. Like they were a huge money losing business prior to coming public valuation got crushed after 2022 and they kind of found religion in let's reduce costs, let's get profitable. We have the ability to do it. We have the market share in most of our markets. Let's be, let's try other things. They've probably been more willing to try other things than Uber, but in general I think he's just run the business really well.

[Brett Schaefer]

Okay, we're coming right up on an hour. What are the conclusions here? You interested in Grab Watch List? Hold, Sell, Hate it. Love it. What are your final thoughts on this stock?

[Ryan Henderson]

I think I'm pop putting this at the top of my watch list for now. There's a good chance that changes and I end up taking a starter position. The only thing holding me back would be the banking efforts. It's way outside my circle of competence. Like Brett said, not, not necessarily banking. I think I understand the general gist of banking, but it's in a market I don't understand. And frankly you really, if you're going to buy a bank, you really got to do a lot of digging into what you think that like long run default rates are going to look like relative to what they earn. And, and I, I do think they're in an awesome spot to continue growing mobility and delivery volume for years to come. I mean they are the leader there. There's a whole bunch of geographic tailwinds in terms of digital penetration and rides becoming more affordable and I think that'll just continue to be a tailwind for their business. I honestly think they could be generating 15% of their enter current enterprise value from cash or in cash from these two businesses alone in five years. If that's the case and financial services doesn't lose a ton of money, I think you're going to get a really good return from from grab here.

[Brett Schaefer]

Okay, if you want all the charts, everything in the notes, Ryan's going to have his report on our newsletter. The link there is in the Show Notes Chit Chat Stocks newsletter I believe not Chitchat Stocks podcast newsletter. It'll be easy to find if you enjoyed this episode, you enjoyed the podcast in general. If you're a new listener, please give us a review on Spotify or Apple. Podcast takes 10 seconds and it's the easiest way to help the show grow. We'll have more Wednesday episodes coming out along with our investing power hours that get released in the podcast feed every Friday morning. So lots of investing talk coming into this earnings season. We're going to be having some fun interviews. We're going to be doing some more research reports. I have one coming out on Oscar Health in a couple of weeks. We're going to be studying a super investor. Lots of fun stuff. So Ryan, thank you for this research report. Anyone that's interested in grab, please reach out to us. We love to discuss with other investors, but let's hit the disclosure and get out of here. We are not financial advisors. Anything we say on the show is not formal advice or recommendation. Ryan I or any podcast guest may hold securities discussed in this podcast. May have held them in the past and may buy, sell or hold them in the future. Thank you everyone for tuning in once again and we'll see you next time. This episode is brought to you by bluehost. You might not be a tech genius, but you want the website for your business to crush it. Thankfully, bluehost makes it easy. Customized, optimized and monetized. Everything exactly how you want. With AI, your site can be up within minutes and the search engine tools even help you get more site visitors. Whatever your passion project is, set it up with Bluehost. With our 30 day money back guarantee.

[Ryan Henderson]

What have you got to lose?

[Brett Schaefer]

Head to bluehost.com to start now.