START-UP VALUATION FOR INTERNAL CORPORATE VENTURE OF PT TELEKOMUNIKASI INDONESIA TBK (CASE STUDY: VENTURE B)

• Main Author: Ghaida Subroto, Cynthia
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/42313
• Institution: Institut Teknologi Bandung

Nowadays, the world including Indonesia is facing the era which disruptive technology quickly emerges and can threaten many companies that are not agile in adapting to the growth of technology. To adapt with the phenomenon, PT Telekomunikasi Indonesia Tbk (Telkom) implements corporate venturing through establishment of Amoeba Digital Program that is corporate innovation lab to manage innovation by employees who form a team named Amoeba. Every Amoeba is incubated by adopting lean start-up methodology where each Amoeba has to go through innovation journey, thus it can be considered as a start-up company. After Amoeba passed all the journey and there is potential upscale revenue, they will become Business As Usual (BAU) of Telkom. Venture B is one of Amoeba that has launched its product and generated revenues. However, recent Venture B’s revenues growth was almost stagnant and in order to sustain the business, Venture B needs innovation by developing new product and needs more financing. A problem confronting Telkom as the parent company which provides the venture capital is determining the value of the venture to determine whether funding should be provided. Therefore, this research is conducted to give insight on how much the venture is really worth and how the venture will be going in the future. Venture B has big opportunities and strengths to grow. To value the venture, combined of Damodaran Method and First Chicago method will be used considering these methods can overcome issues emerged in valuing start-up company and provide better view on Venture B’s overall potential through combining the value of three different scenarios. The value of Venture B with new business model then will be compared with the value of Venture B with existing business model. From the result, Telkom can know how much Venture B is really worth which can help Telkom determine future strategy. The valuation results show that Venture B’s value with new business model has higher value than existing value. The value of Venture B with new business model is IDR 58,198,205,746, while value with existing business model is IDR 139,322,137. From the valuation results, Telkom’s investment will be worth thus they should give the additional fund to allow Venture B does the innovation and develop its new product. Venture B can give benefit to Telkom as the parent company in the form of additional revenue and new market reach. However, Telkom should also give benefit to the venture team such as financial and nonfinancial rewards and help them develop their skills to make the employees feel of self-achievement and more job satisfaction. Consequently, it will give benefit also to Telkom as employees will be excited to come to work thus reduce employee turnover. In implementing the new business model, it is important to do evaluation periodically both by Telkom and Venture B to respond if there are any changes and immediately solve if problems emerge.