(Bloomberg) -- Singapore’s Grab Holdings Inc., set to go public in the U.S. through a deal with a blank-check company, reported a narrower loss for the first quarter as the pandemic boosted demand for food delivery.

The company’s net loss shrank to $652 million in the quarter ended March 31 from $771 million a year earlier, Southeast Asia’s most valuable startup said in a statement on Monday. It reported revenue of $216 million from just $1 million a year earlier, a figure that was revised sharply downward to meet international accounting standards after the U.S. Securities and Exchange Commission asked the ride-hailing giant deduct incentives paid out to consumers.

Grab reported its first-ever quarterly financial results in a filing connected to its planned merger with Altimeter Growth Gorp., the special purpose acquisition company of Brad Gerstner’s Altimeter Capital Management. Grab has postponed the $40 billion deal -- one of the largest-ever mergers with a SPAC -- to the fourth quarter as it works on an audit of the past three years.

Full-year 2020 revenue was revised to $469 million from previously reported $1.2 billion after changing how it treats consumer incentives, Chief Financial Officer Peter Oey said during the company’s earnings call on Monday. Grab said the change won’t affect its historical balance sheet, cash flow, gross merchandise value, gross billings, adjusted net sales, or adjusted earnings before interest, taxes, depreciation and amortization.

“It is purely a change in presentation and economics of our business have not changed,” Oey said during the webcast.

The company also provided an update on its post-merger board. Grab co-founder Hooi Ling Tan and Rich Barton, chief executive officer of Zillow Group Inc. and a director of Altimeter Growth, will join as independent members on the six-person board. They will replace two outgoing members, who are representatives of shareholders SoftBank Group Corp. and Toyota Motor Corp. Other independent directors include Uber Technologies Inc. CEO Dara Khosrowshahi, Ng Shin Ein and Oliver Jay.

“Personally I prefer smaller boards with real operators, which we have on this board,” Altimeter Capital’s Gerstner said in a virtual interview. SoftBank and Toyota have other investments in the region that may be competitive, so it was “appropriate” for the the company to reconstruct the board after the merger, he said.

Key Insights

  • Adjusted net sales, a revenue measure that doesn’t comply with international accounting standards, rose 39% to $507 million in the quarter.
  • First-quarter GMV grew 5% from a year earlier to $3.6 billion.
  • Deliveries revenue was $53 million.
  • Mobility revenue was $145 million, up 18% from a year ago.
  • Financial services revenue was $8 million.
  • Grab expects demand for mobility services to remain volatile as a resurgence in Covid-19 cases have impacted its markets, leading to renewed restrictions in the second quarter.
  • Spend per user rose 31%.
  • Grab had $4.9 billion of cash and cash equivalents as of March 31, compared with $3.5 billion at the end of 2020. This was primarily due to the closing of Grab’s first senior secured term loan facility of $2 billion at the end of January.
  • Total outstanding debt was $2.1 billion at the end of March, up from $212 million at the end of 2020, reflecting the term loan facility.

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  • Deliveries GMV grew 49%, offsetting weakness in ride-hailing services due to lockdowns and other restrictions during the pandemic.
  • Adjusted net sales for deliveries was $293 million, up 96% from a year earlier.
  • Adjusted net sales for mobility was $167 million, down 14% from a year ago.
  • Adjusted net sales for financial services was $23 million, up 31% from a year ago
  • GMV at GrabMart, a relatively nascent goods delivery offering that has expanded across eight Southeast Asian markets, increased by 21% from the fourth quarter of 2020.

Market Reaction

  • Altimeter Growth rose 2.3% to $10.92 at 10:35 a.m. in New York on Monday.
  • That compares with a debut price of $10 and a high of $15.33 soon after the Grab deal was unveiled in April.

(Adds revised 2020 revenue, comment from Brad Gerstner from fourth paragraph.)

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