Grab Hits Delivery Record, Projects Breakeven in Q3
Instacart's ad growth, Cartken in Arizona, burger delivery prices
Southeast Asia’s Grab posted a strong Q2, with its delivery arm outpacing its older mobility segment. The company also saw growth in its advertising business, which is becoming a familiar story across the industry. And read on for a particularly delicious chart!
Grab’s Strong Q2 Points to Continued Success
Is Instacart Just An Ad Business?
Chart Time | Burger Delivery Across the Globe
Cartken Goes Big in Arizona
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3PD | Grab Hits Delivery Record, Projects Breakeven in Q3
Southeast Asia’s mobility and delivery super-app Grab just put out bumper quarterly results, sending shares up 12%. Q2 revenue grew 77% YoY to $567 million, while its losses shrank 74% to $148M and adjusted EBITDA narrowed to -$20M. The company’s delivery business finally outgrew its ridehail arm, with delivery revenue up 118% YoY to $292 million, while mobility/ridehail was only up 29% to $208M. The company’s subscription business, GrabUnlimited, saw 43% annual growth; those users accounted for one third of delivery GMV and spent 3.8x more on food deliveries compared to non-subscribers.
The Big Picture: Grab’s delivery GMV hit $2.573 billion for the quarter, showing it has similar scale to players like Deliveroo, but still has only about 20-25% of the delivery heft of players like DoorDash, Uber Eats and Delivery Hero. Nonetheless, Grab is nearing profitability of its own; the company pulled forward its adjusted EBITDA breakeven guidance from Q4 to Q3. Grab’s sparring partner in Southeast Asia, GoJek, also recently reported it was nearing profitability, on the back of heavy cost cutting.
OPERATIONS | Are Delivery Cos Really Just Ad Plays?
With Instacart’s IPO looming, analysts are pouring over the company’s numbers, looking for strengths and weaknesses. With the company having missed its window for a boom-time IPO, its suspected valuation is about 1/3 of peak, as growth has slowed. But one part of the business is still showing healthy gains: advertising! While “the volume of groceries and other goods it delivered barely budged,” ad growth helped push revenues up more than 30% in H1. And while delivering groceries is a messy and low-margin business — the opposite is true of advertising: each additional ad you can deliver is almost 100% pure profit.
The Big Picture: Instacart isn’t the only player pushing into delivery. Part of Grab’s success story (above) also relies on ads — it’s grown the segment to $100M on an annualized basis. Uber’s ad run rate is $650M; Deliveroo’s is on track for $69.7M; DoorDash called out a “growing contribution from advertising.” And not only are these profitable divisions — they’re fast growing. So will a Madison Avenue honcho be the next Fidji Simo?
CHART TIME | How Much For That Hamburger?
While The Economist has long indexed the price of Big Macs as a way to measure relative purchasing power between economies, Measurable.AI is now charting how much it costs to get one of those hefty hamburgers delivered. Looks like the Japanese should stick to in-store pickup, while those Swedes are getting a rare deal!
AUTOMATION | Cartken Hits 50,000 Orders at U of A
As back to school season nears, Cartken is celebrating the continuation of its partnership with the University of Arizona. Last school year its bots moved 50,000 orders to 60 drop-off sites, with students doing over 400 orders per day at a 75% reorder rate. 41 robots had a median drive time of 12 minutes and 55 seconds. The partnership was a collaboration with Grubhub Campus Dining.
The Big Picture: College campuses have proven to be a bright spot for delivery robotics, with the concept powering Starship’s domination of the industry. A high density of hungry students, plus a paucity of high-traffic highways, shows the appeal of serving schools over truly public sidewalks. Starship often strikes these partnerships on its own, serving students via its in-house app. With multiple competitors working with Grubhub, it’ll be tough to compete on more than just price.
A Few Good Links
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