Grab’s US$200 million late-stage funding round in August 2020 brought the Singapore-headquartered tech giant’s valuation to a whopping US$14.3 billion. The deal was just one of many that have hit the headlines of late, with news reports touting sky-high valuations for many startups.

But what’s the point of a valuation? And what does it actually say about a business?

In this episode of Tech in Asia Explains, Openspace Ventures’ Gervin Yang, Gobi Partners’ Kay-Mok Ku, and Funding Societies’ Kelvin Teo shed some light on startup valuations and discuss how to calculate what a business is worth.

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Tech in Asia Explains is a Tech in Asia Originals series that dives into everything that budding entrepreneurs need to know about starting up a business, getting insights from leading personalities from within the industry.

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Transcript:

Nathaniel:
In August 2020, Grab raised a US$200 million late-stage funding round, which brought the Singapore-headquartered ride-hailing startup’s valuation to US$14.3 billion, making it one of the most valuable startups in the region.

That deal was just one of many that have hit the headlines, touting sky-high startup valuations. But what’s the point of a valuation? And how do you calculate how much a startup is worth?

We’ll find out in this episode as Tech in Asia Explains: Startup Valuation.

Startup valuation is exactly what it sounds like – it is the best estimate of how much a startup is worth.

Kay-Mok Ku:
In the process of valuation, a lot of subjective factors come into play, such as the attractiveness of the company’s team, competition from other bidding investors, and I think even strategic considerations from the investors.