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Where cash is still king, governments are partnering with superapp Grab to bring people into the formal economy

December 1, 2021, 7:32 AM UTC

As some governments move to limit the reach of superapps—mobile applications that provide a wide variety of services—others are partnering with them.  

In China, the government has been working to loosen WeChat’s grip on most aspects of daily life, most recently by forcing it to allow links to external platforms. 

But in Malaysia, officials relied on Grab—Southeast Asia’s most valuable startup, which is set to go public via SPAC on Thursday—to help distribute pandemic relief funds through its digital wallets, and in Indonesia, Grab partnered with the government to set up dozens of drive-thru COVID vaccination centers. 

In a region where cash is still king, governments have good reason to team up with superapps like Grab as they try to bring more people into formal economic systems. “Many of these individuals within Southeast Asia are currently working in the gray economy. They’re not paying taxes. They have no health care benefits,” Grab president Ming Maa said in a virtual conversation at the Fortune Brainstorm Tech conference in Half Moon Bay, Calif. “It’s this partnership mindset and helping to create true nation building that I think is quite unique.”

Grab started as a mobile taxi booking app in Malaysia, but it has ballooned into a superapp that serves as a one-stop shop for a bevy of services—from food delivery to ride hailing and cashless payments.

Thousands of drivers across eight rapidly growing countries—including Vietnam, Cambodia, Malaysia, Singapore, and the Philippines—power Grab’s operations. 

“It’s this large on-demand network that’s been core to how we expanded our superapp ecosystem,” Maa said. “We’re able to now leverage this network to move not just people but also food, e-commerce packages, and now even groceries. All of these grew as natural adjacencies to our start.” 

The pandemic’s lockdowns and social distancing rules created an environment in which superapps like Grab can thrive, especially in places where significant portions of the population have yet to embrace credit cards, let alone digital banking. In the pandemic, meal and grocery delivery and touch-free payment options became essential, not just nice-to-have features for well-off, tech-savvy users.  

Spending per user on Grab is up 43% over the past year, the company said in its third-quarter results in November. “We’re not providing siloed services,” Maa said. “It’s about combining the services together on both the consumer side and the merchant side.”

Grab is expected to make its debut on the Nasdaq on Thursday as part of a SPAC deal with Altimeter Growth Corp. that’s valued at around $40 billion. 

“We’re very honored, but it is just one moment in time for us. What we’re really focused on is all the opportunities ahead of us,” Maa said of the SPAC. “There’s still a ton of work to be done.”

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