Grab (GRAB) has agreed to acquire a majority stake in the digital financial services platform of Singapore-based Advance Intelligence as the ride-hailing and delivery company looks to bolster its consumer lending business across Southeast Asia.
Grab will purchase a 60% interest in buy-now, pay-later platform Atome Financial for $1.49 billion in cash, of which $260 million is "primary growth capital," it said Tuesday.
Atome and Grab operate in Singapore, Malaysia, the Philippines, Indonesia and Thailand, "with minimal product overlap," according to Grab. Atome serves 25 million users, expanding Grab's consumer lending portfolio.
"Atome Financial's leading use of (artificial intelligence) to underwrite digital lending to millions of users across the region, while managing risk effectively, will help to scale and strengthen Grab's whole ecosystem," Grab Chief Operating Officer Alex Hungate said. "The proposed transaction accelerates the growth and profitability of our financial services segment by deepening our consumer lending capabilities."
Grab's US-listed shares fell 1.8% in Tuesday trade, with the stock having lost 41% so far this year.
Grab's ecosystem and Atome's AI-powered lending infrastructure will expand financial services access to "millions more across Southeast Asia," according to Jefferson Chen, CEO of Atome and Advance Intelligence.
The transaction, which requires approval from regulators, is expected to complete by the third quarter of next year.
Grab estimates the acquisition to be accretive to its adjusted earnings before interest, taxes, depreciation and amortization upon completion, according to Chief Financial Officer Peter Oey. The company forecasts its financial services division, including Atome, to deliver $500 million in adjusted EBTIDA by 2028, Oey said.
Grab now expects $1.7 billion in group adjusted EBITDA in 2028 and a more than 30% compound annual revenue growth rate from 2025 to 2028, the CFO added.
Last month, Grab lifted its full-year revenue outlook after recording better-than-expected second-quarter top-line.
The company agreed to acquire the remaining 40% stake in Atome about two years after the 60% stake deal completes, for a price based on the platform's financial performance during the period. The expected terms imply an overall equity value of $2 billion to $4.5 billion for Atome, according to Grab.
In July, Grab completed the purchase of a 50.1% stake in US digital investing platform Stash Financial. Earlier in the year, the company agreed to buy Germany-based Delivery Hero's Taiwanese food delivery operations for $600 million.
In the broader industry, ride-hailing giant Uber Technologies (UBER) announced in July a deal to acquire Delivery Hero in a deal representing an equity value of $14.8 billion. Last year, food delivery company DoorDash (DASH) bought its UK-based counterpart Deliveroo.
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