South-east Asian super app Grab has cut quarterly losses for the first time in 18 months, sending its shares up 24 per cent after a long decline following a Spac merger in which it listed with a valuation of $40bn.

The Singapore-based group, which went public last year in one of the world’s biggest Spac deals, reported a loss of $435mn for the first quarter on Thursday, 60 per cent lower than the previous three months and its first improvement since the third quarter of 2020.

After plunging more than 80 per cent since its Nasdaq debut, shares in the company jumped after the earnings release to give it a market valuation of $9.7bn.

Concerns about profitability are weighing on technology companies around the world. Across south-east Asia, the ecommerce and ride-hailing industries are dominated by a few big players that have burnt cash to gain market share.

Shares in rival GoTo, another lossmaking business that offers ride-hailing and payment services, have shed almost a fifth of their value following a positive trading debut in Indonesia last month.

Sea, another big digital payments provider, said this week that losses had increased 37 per cent year on year to $580.1mn in the first quarter.

During a call with analysts, Grab chief executive Anthony Tan said the company was “laser-focused on meeting our profitability targets”. He added that Grab, which provides food delivery, e-scooters and insurance services, would seek to do this by “optimising” costs and preparing its core businesses for recovery as it emerges from the coronavirus pandemic.

But Nirgunan Tiruchelvam, a south-east Asian tech analyst at Tellimer, said he did not expect the company to reach net profitability until the end of 2024. Spending on advertising and incentives for consumers and drivers, such as discounts and extra commissions, could keep rising until then, he added.

Grab said it expected to record revenues of at least $1.2bn for the full year, an increase of 78 per cent over the previous 12 months as the easing of pandemic restrictions increases demand for ride-hailing services. The number of drivers working for the company had returned to the highest level since the second quarter of 2020, it added.

“Our first-quarter results are a testament to the resilience of south-east Asia’s economy as we move past the worst of the pandemic restrictions. We are optimistic that our business will continue to strengthen as more countries pivot to living with Covid-19,” said Tan.

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