How to build a $2 billion a year super app called Grab: the ’20 hour’ day

Anthony Tan doesn’t need to start a business to get rich.

He grew up as the youngest of three sons in one of the richest families in Malaysia. His father, Tan Heng Chew, is the president of Tan Chong Motor, a multinational car distributor founded by Tan’s grandfather in the 1950s, which is listed on the Kuala Lumpur Stock Exchange.

You can call me a “rebel without a cause,” Tan said. But I’m on a mission to create something that can be a “force for good.”

Currently, Tan is the co-founder and CEO of multinational ride-hailing giant and super app Grab. After the business goes public in the US in December 2021, it will generate more than $2 billion by 2023, according to documents seen by CNBC Make It.

Now, along with offering ride hailing, the company offers food and grocery delivery, as well as financial services such as payments, credit and digital banking. In 2023, Grab also serves more than 35 million customers and provides 13 million gig jobs in eight countries in Southeast Asia.

“I remember when I met with (former President Ferdinand) Marcos in the Philippines, and he reminded my council and I … (Grab) literally changed the national unemployment figure,” he said. “That’s what I’m going to say makes us all very happy.”

In 2009, Tan began studying at Harvard Business School, where he met co-founder Hooi Ling Tan. Having both grown up in Malaysia, they became good friends after sitting next to each other in a class called “Business at the Base of the Pyramid.”

One day in 2011, they were talking about the Malaysian taxi system, which at the time was notorious for being unsafe, especially for women. The two decided to take up the challenge.

“We want to create a standard of hygiene that women can practice anywhere (safely),” Tan said. “We both really believe that we are very blessed (and) we want to serve Southeast Asia.”

He went on to create a business plan, which he submitted to a start-up contest at the university. He won the first prize and received a prize of $25,000, which he used as seed money for Grab.

Today, Grab is backed by SoftBank, and the company has a market cap of over $14 billion.

However, Tan’s journey to start Grab was not an easy one.

Always working in the family business, Tan is expected to return from studies and return to the company. So when he went to his father with the idea of ​​Grab, the conversation was not taken lightly.

“(My father) said, ‘Hey, I don’t think it will work, so don’t bother me anymore,'” Tan said. “It’s hard. It’s an idea like, it’s never enough … but, I think that (moment) pushed me to say, ‘Look, I can create something that can solve a real social problem.’

He took the same pitch, refined it, and brought it to his mother, who eventually became Grab’s first individual investor. With the money from the start-up contest and his mother, Tan also invested everything he had in the bank to start the company in June 2012. At that time, the company was known as “MyTeksi.”

The first few years in business were not glamorous by any means.

Tan and co-founders have meant that the only task is to build a new infrastructure for the Malaysian taxi system, but money is a big limiting factor.

The original office was in a small room in Kuala Lumpur, Malaysia – a part of the world known for its hot and humid weather all year round. The office has no ventilation, AC and even WiFi. “We have to tether from our cell phones,” Tan said.

The team also found it difficult to bring drivers to the platform without enough funding, so they had to be creative.

To transport drivers in the early days, Tan was in the field of travel in Southeast Asia, trying to convince taxi workers to try Grab.

Tan noticed that before starting their shift in the morning, drivers in Ho Chi Minh, Vietnam, would stop at a gas station for coffee. So he would come around 4am to give free coffee to taxi drivers, which is also when he invited them to join Grab. “That’s the only way, and that’s all there is to it,” he said.

“In Manila, I remember going to meet the taxi fleet, because they always change shifts at four in the morning … then (I spend) time with them (with some) cheap beer, (to try) to understand the pain. , the problem, why do you need other income,” said Tan.

“It’s very powerful,” he said. “Between flying – I was doing two to three cities a week when we were going through the growth and scaling phase – I was probably doing 15, 18, sometimes 20 hours a day, and that was Monday to Sunday.”

In 2018, after a long and difficult battle, Uber agreed to sell its Southeast Asian business to Grab in exchange for a 27.5% stake in the company. As part of the deal, Uber CEO Dara Khosrowshahi joined Grab’s board of directors. This deal cements Grab’s dominance in the region.

What started as a dream to fix safety issues in Malaysia’s taxi system has now become a super dominant app in Southeast Asia, but this dominance is not only controversial. The company has faced antitrust charges from critics and regulators.

However, there is no denying that Grab has built infrastructure in Southeast Asia.

It has changed the way people in the region go about their daily lives, and empowered those “at the bottom of the pyramid” by giving them access to things like micro-financing programs, so they can buy. smartphone and start making money as a driver.

“That’s what sets us apart, right? Knowing what the problem is,” he said. “People can say, ‘hey, Anthony, you’re just serving a niche.’ Yes, it’s a huge niche that has an underserved and underserved market.”

“It’s all about helping them, being an ecosystem where no one else can … and that’s what sets us apart from our peers.”

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