Tag: grab

  • Grab doubles down on fintech

    Grab doubles down on fintech

    Singaporean super app Grab reached its first full year of profitability in 2025, posting US$200 million in net income. For a company once best known for burning cash in a race to the bottom against Uber and later GoTo, this is an important milestone—even if investors remain skittish: Grab’s stock has fallen 22% over the past year despite its improved financials.

    We have been following the Singapore-based firm closely ever since it launched a bid for a digital banking license in Singapore almost six years ago, and it has come a long way in terms of fintech capabilities. In the fourth quarter, Grab reported a 34% annual increase in financial services revenue to US$99 million, up from US$74 million a year earlier.

    Financial services revenue, while growing fast, is still just a fraction of the company’s overall business. Total group revenue for the fourth quarter was US$906 million, generated mostly by mobility and deliveries.

    Grab’s digital banking deposits in Singapore and Malaysia have reached US$1.6 billion, a modest increase over US$1.2 billion a year earlier. Perhaps more noteworthy is that its loan portfolio has doubled over the past year from US$1.18 billion from US$536 million at the end of 2024.

    Still, even by digital bank standards, this is not yet a significant lending business. Brazil’s Nubank, for instance, has a US$30.4 billion loan portfolio.

    Additionally, Grab’s fintech business remains unprofitable while facing stiff competition from both pure-play fintechs and incumbent banks in Southeast Asia. Despite having millions of users in its ecosystem, converting them into active, high-balance digital banking users has proven difficult for the Singaporean firm. Most of the company’s customers have low average balances because they are not switching over from their primary banking providers.

    At the same time, Singapore and Malaysia don’t have large underbanked populations that can allow digital banks to quickly build scale. More than 90% of adults in both countries have bank accounts, and most of the analysis claiming they have large “underbanked” populations stretches the definition of that term.

    Grab does own an 11% stake in Indonesia’s SuperBank, which is also backed by Emtek and Kakao Bank. Superbank went public on the Indonesia Stock Exchange in December, raising approximately US$168 million (Rp 2.79 trillion). The shares jumped 24% on their debut after being oversubscribed 318 times.

    Superbank offers Grab’s fintech business more significant growth potential than GXS Bank in Singapore and Malaysia because Indonesia actually has a large underbanked demographic. About 60% of Superbank users come from Grab’s ecosystem, allowing it to scale up quickly. The digital lender posted a profit of about US$5 million in the third quarter of 2025.

    The most ambitious fintech-related move by Grab in recent months is its acquisition of the U.S.-based investment app Stash Financial for US$425 million in a deal expected to close in the third quarter of 2026. Grab will acquire 50.1% of Stash in a mix of cash and stock at closing, with the remaining stake purchased over the next three years.

    The acquisition provides Grab with an established platform to enter the mass-market investment segment. Stash has over US$5 billion in assets under management and over one million subscribers.

    We don’t see Grab trying to bring its super app to the United States, but owning Stash will give it exposure to the U.S. market that it would not otherwise have.What we expect Grab to do, though, is try to leverage Stash’s capabilities in Southeast Asia to offer more tailored wealth management systems to its customers. It remains to be seen, however, how much traction this move will get. Grab’s communications about the acquisition emphasize Stash’s “AI-powered ”capabilities”—which could describe just about any digital wealth management service in existence today.

  • Why is GXS Bank cutting 10% of its staff?

    Why is GXS Bank cutting 10% of its staff?

    One of the brightest ideas (or not) of Southeast Asia’s early 2020s tech bubble was centralizing every digital service imaginable in a single smartphone app, a barely veiled attempt to replicate the success that China’s dominant platform companies enjoyed with this business model. Unsurprisingly, the results have been inconclusive because China is a unique market and we are willing to bet that there will not be another Alipay or WeChat anywhere. 

    That’s a key reason that GXS Bank, the digital banking venture of Singapore-based erstwhile super app Grab (it doesn’t use that term so much anymore) and Singaporean telecoms giant Singtel faces a tough slog. How many people, ultimately, prefer to bank with the same company they use to book taxis and order pizza? Or their mobile phone service provider? Pure-play fintechs just seem more focused on, well, you know, financial services.

    There are other challenges that GXS Bank faces. Here are a few of them: high operating costs, low customer engagement (many accounts are inactive), intense competition from established banks with wider offerings, and the challenge of monetizing a saturated market in which most people already have bank accounts. GXS Bank faces pressure to scale, cut costs and move beyond basic savings to more profitable lending and investment products. Ultimately, GXS Bank must prove its viability against legacy banks that quickly match digital features.

    It is against that backdrop that the company recently slashed headcount by 10%. The decision to reduce headcount is part of the group’s transition from the early growth stages of building a bank to running the operations, GXS group chief executive Lai Pei-Si said in a note to staff. “The roles that are essential as we move forward and focus on running the bank may be different from our build phase,” said Lai.

    Lai said that after conducting a strategic review, GXS tried to “reshape” itself for a year and a half. She said that the digital lender has only backfilled vacated roles that it believes are essential for the group for the years ahead. It has also “regionalized” its core capabilities, such as data, product and technology, to “improve collaboration” and scale its product innovation across multiple markets. “However, the pace of organic reshaping has been slower than expected,” she said.

    A year ago, GXS Bank was still singing a triumphant tune. The company published a press release that emphasized it had 3 million customers across Southeast Asia, including Singapore (200,000 in the city-state), Malaysia and Indonesia. That sounds pretty good – until one considers that Indonesia has a population of 286 million and Malaysia 31.5 million. 2.8 million customers is less than 1% of the combined populations of those countries. 

    “We are well-positioned to grow our business and serve even more customers in the coming year. 2025 will be the year of significant scaling up for the digital banks in the GXS Group,” then Group CEO Muthukrishnan Ramaswami said. 

    Things have turned out a bit differently than that rosy prediction. Still, with Grab-Singtel’s deep pockets and Singaporean state backing, their digital banking ventures are in no danger of failing, even if Grab’s overall performance continues to disappoint investors. After all, this is a company whose stock price has fallen almost 60% since its Dec. 2021 market debut on the Nasdaq. 

    At some point, Grab will undoubtedly move from the red into the black, but will its digital banking subsidiaries live up to the hype surrounding them? In contrast to the Wall Street analysts cheerleading for Grab, we’re not so sure, especially when native digital competitors like Standard Chartered-backed Trust Bank seem to understand the banking business better.