Valuation of Digital Enabler Startup Case Study of Rolling Glory Responding to Capital Injection
Businesses are shifting towards digital approaches and it’s about time to join digital movement. As everything goes digital, digitization would be a huge demand in upcoming years. As goes the environment, digital enablers would be needed more than ever. Digital enablers are consulting firms &...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/26147 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Businesses are shifting towards digital approaches and it’s about time to join digital movement. As everything goes digital, digitization would be a huge demand in upcoming years. As goes the environment, digital enablers would be needed more than ever. Digital enablers are consulting firms & agencies that are in the business of helping companies set up their digital armaments. With those opportunities lie ahead, Rolling Glory, a digital enabler startup, is seeking for an expansion in order to meet such demands. At the same time, a reputable investor is looking for a production team in order to digitize their products and solutions. The investor would offer IDR 300 million in exchange of 20% of ownership of Rolling Glory. As part of the agreement, their digital solution needs will be provided by Rolling Glory. From Rolling Glory’s point of view, it will be seen as buffing up their portfolios by doing projects from big companies while expanding the capabilities and completing key resources for the company. <br />
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Examining many valuation methods, the most appropriate valuation methods are Discounted Cash Flow and First Chicago Method. From these methods, value of IDR 27.4 billion and IDR 28.2 billion is obtained respectively. These values would then be compared with value if the investment did not happen. Framework is now needed to tell whether company should exercise the investment or not. The contribution from the investment must be bigger than 20% so that it would be worth it for the company to take the investment opportunity. A contribution of 57.26% and 58.54% are obtained. This will tell the company to take the opportunity. Last, it is found that annual revenue’s growth and annual salary’s growth will be top 2 deciding factors that would affect the value of the company. <br />
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