START-UP VALUATION OF EMAGO (PT. TELEKOMUNIKASI INDONESIA, Tbk) USING BERKUS & RISK FACTOR SUMMATION METHODS

• Main Author: LAILA NURSYAHBANI-29116147, RIZKYA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/30605
• Institution: Institut Teknologi Bandung

The world economy is experiencing a tremendous disruptive event. Old players can be <br /> <br /> <br /> <br /> disrupted by newcomers who are still small because they make a simple product and much <br /> <br /> <br /> <br /> cheaper, in this case it is start-up. Start-up is a young company under the age of 3 years <br /> <br /> <br /> <br /> based on digital that aims to develop viable business models and create innovative product, <br /> <br /> <br /> <br /> service, platform, or process that have very limited histories, small or even have no <br /> <br /> <br /> <br /> revenues, dependent on private equity, and dominated by intangible assets instead of <br /> <br /> <br /> <br /> tangible assets. This disruption phenomenon is also felt by PT. Telkom as the largest <br /> <br /> <br /> <br /> Telecommunication company in Indonesia. To respond the rapid changes in this era, <br /> <br /> <br /> <br /> Telkom is transforming its legacy business to digital business line. In January 2017, the <br /> <br /> <br /> <br /> company established an incubator program named Amoeba consist of start-ups to generate <br /> <br /> <br /> <br /> new business and solution for the on-going issue that adopted a lean start-up model where <br /> <br /> <br /> <br /> each one of the start-up goes through stages of validation process. Having to invest in <br /> <br /> <br /> <br /> Amoeba, Telkom wants to asses its start-ups in order to determine how much the business <br /> <br /> <br /> <br /> worth. However, assessing digital start-ups will slightly different than the conventional <br /> <br /> <br /> <br /> business considering the characteristics of start-up itself. Thus, the valuation on start-ups <br /> <br /> <br /> <br /> that have not reached the profitability level or still on the seed stage is based on a number <br /> <br /> <br /> <br /> of empirical assumptions under considerable uncertainty conditions. There are some <br /> <br /> <br /> <br /> valuation methods for digital start-up emerged such as Berkus Method, Risk Factor <br /> <br /> <br /> <br /> Summation, Scorecard Method, Comparable Transactions, Book Value, Liquidation Value, <br /> <br /> <br /> <br /> Discounted Cash Flow, First Chicago, and Venture Capital. Most of the literature described <br /> <br /> <br /> <br /> what the methodology is, the provisions on calculating the valuation but limited only to <br /> <br /> <br /> <br /> what factors that being assessed and how much value that the start-up could get. Therefore, <br /> <br /> <br /> <br /> the author made a modification on Berkus and Risk Factor Summation methods in order to <br /> <br /> <br /> <br /> generate a better understanding regarding the methods as well as to simplify the valuation <br /> <br /> <br /> <br /> process that will conducted by PT. Telkom.