DEVELOPING SCREENING CRITERIA AND VALUATION METHOD OF CORPORATE VENTURE CAPITAL: THE CASE OF TELKOMSEL MITRA INOVASI (TMI)

• Main Author: Arvyana Jayaprima, Mochamad
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/63972
• Institution: Institut Teknologi Bandung

In 2019, Telkomsel established an investment arm named Telkomsel Mitra Inovasi (TMI) and focuses on investing in early-stage businesses by leveraging Telkomsel's ecosystem, assets, and expertise. However, investing in early stage companies is inherently risky because the businesses of startups at this level are not yet developed. Therefore, to reduce the risk of investing in early-stage companies, the objective of this thesis is to develop a screening criteria and valuation method for TMI to achieve its desirable objectives. Qualitative research will be used to analyze the current selection criteria implemented by TMI. Moreover, explorative research will be used to explore the valuation method of CVCs to evaluate startup investments. In addition, the data collection of this study will be obtained by primary data and literature review. Primary data will be collected by conducting interview with key stakeholder at TMI. The literature review will be collected by several previous studies regarding CVC screening criteria and valuation method. This study finds the gaps between the screening criteria from the literature review and the screening criteria currently used by TMI. Therefore, this study suggests TMI to add several screening criteria found from the literature review, which are experience/track record of the management team, geographic location, investment timing/stages, cooperation with other VC, and financial characteristics. As for the valuation method for early-stage startups, this study finds that the method currently used by TMI, which are the DCF method and market multiples, are traditional method and are not suitable to value an early-stage startups. Hence, to reduce the issue or error in the valuation of startups, this study suggests TMI to use alternatives valuation method such as the Scorecard method, the Berkus method, modified DCF method, and the First Chicago method.