Valuation of a fintech for Series A funding round
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Assignment
A B2B FinTech startup which had built a closed loop payment authorization system for the MENA market directly connecting the Acquiring Bank with the Merchant Bank for seamlessly processing payments mandated us to provide a valuation and advice on their fund-raising process.
Our Approach
Outcome
Since the company was at an early stage of its evolution (i.e., pre-revenue stage) we valued the business using the Venture Capital (VC) Method using Price / Sales multiple adjusted for growth (i.e., "PSG" metric).
This metric was benchmarked to several private and publicly listed entities in the B2B payments space to arrive at the exit valuation, which was discounted to (a) capture the desired IRR for the investor, and (b) account for additional rounds of dilution.
Our report helped the startup to showcase long-term returns from the business subject to certain milestones being reached within a pre-defined timeframe.