THE IMPACT OF COVID-19 ON STARTUP VALUATION METHODS: A STUDY AT MDI VENTURE
The "winter tech" phenomenon, marked by employee layoffs and technology usage decline in leading Indonesian digital startups like GoTo and Traveloka, is exacerbated by the COVID-19 pandemic, causing a widespread economic downturn, and revealing financial instability. Despite government sup...
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| Format: | Theses |
| Language: | Indonesia |
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| Online Access: | https://digilib.itb.ac.id/gdl/view/79588 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | The "winter tech" phenomenon, marked by employee layoffs and technology usage decline in leading Indonesian digital startups like GoTo and Traveloka, is exacerbated by the COVID-19 pandemic, causing a widespread economic downturn, and revealing financial instability. Despite government support, persistent challenges, notably the correlation between layoffs and startup failures, underscore the role of venture capital. The thesis focuses on understanding venture capital factors, limitations in valuation methods, and addressing the impact of COVID-19 on venture capitalists and changes in startup valuation practices.
This research employs semi-structured interviews, primarily with Winston Joshua Adi, MDI Venture's Vice President of Portfolio Management, to explore the company's investment strategies. The chosen method aligns with the research objective, offering flexibility for comprehensive insights. Winston's extensive experience and leadership position make him a key informant. Ethical standards, including informed consent and data confidentiality, are maintained. The study uses a five-stage thematic analysis process to comprehensively analyze themes related to startup success factors based on interview text.
MDI Venture utilizes the GPCM valuation method, emphasizing factors like EV/LTM EBITDA and EV/LTM Revenue for startup growth assessment. Ongoing post-investment valuation ensures a fair distribution of proceeds, with a focus on safeguarding investors. The COVID-19 pandemic has impacted MDI Venture's investment activities, influencing market corrections and investment pace. The company now adopts a cautious approach, prioritizing pandemic-related risk assessment and seeking comprehensive plans from startups before funding, particularly those with online-centric models.
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