How to value a Startup? : A share price assessment of bumble
This paper examines the typical attributes of startups, extensively studying their main characteristics. The analysis shows that most startups need more historical data and financial information to forecast future trends. Moreover, they stand out for companies with operating losses and high operatio...
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| Tipo de recurso: | tesis de maestría |
| Fecha de publicación: | 2023 |
| País: | España |
| Institución: | Universitat Politècnica de Catalunya (UPC) |
| Repositorio: | UPCommons. Portal del coneixement obert de la UPC |
| Idioma: | inglés |
| OAI Identifier: | oai:upcommons.upc.edu:2117/396215 |
| Acceso en línea: | https://hdl.handle.net/2117/396215 |
| Access Level: | acceso abierto |
| Palabra clave: | Computer industry -- Management -- Finance New business enterprises -- Valuation -- Case studies Online social networks Informàtica -- Indústria i comerç -- Direcció i administració -- Finances Empreses -- Creació -- Valoració -- Estudi de casos Xarxes socials en línia Àrees temàtiques de la UPC::Economia i organització d'empreses::Comptabilitat i control financer |
| Sumario: | This paper examines the typical attributes of startups, extensively studying their main characteristics. The analysis shows that most startups need more historical data and financial information to forecast future trends. Moreover, they stand out for companies with operating losses and high operational risk. Nevertheless, on the other hand, they are ventures with high potential growth and upside. Startups heavily rely on equity financing as opposed to traditional debt financing. This thesis also shows numerous examples and references, the shortcomings of some traditional valuation methods, and analyses the quality of alternative non-traditional methods. The case study extensively studies the company and industry of Bumble Inc., Showing that the Online Dating industry is very competitive and depends highly on marketing and selling expenditures. However, Bumble, the second most significant player worldwide, is well positioned in the market, using a disruptive methodology in its networking app. The main risks that the company faces are competitive risks, privacy and security risk, and reputational risk. Lastly, the case study also assesses Bumble Inc.'s share price using the valuation methods examined in the first part of the paper. While most valuation methods produce a range of values in line with the market, some non-traditional valuation methods could be more accurate due to the substantial size of Bumble Inc. compared to most startups. The outcome of the case study values Bumble Inc. between $20 to $25 per share, implying that the company may be undervalued at the moment, with a current share price of $17.8 |
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