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Why Valuation Fuss? We are in Line with the World
Why Valuation Fuss? We are in Line with the World

July 22, 2021

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Valuation holds big importance in the start-up ecosystem and nowadays it is one of the defining parameters in measuring the success and scale of a start-up. Off lately we have been talking a lot of soaring unrealistic valuation of Indian stat-ups. Well for those who think that the valuation game in the Indian start-up ecosystem is unrealistic then they should check how the valuations of the top start-ups outside India have moved over the years.

I am not going deep into the start-up ecosystem but trying to see the difference in the rise in valuations of the top 4 start-ups both in India and abroad. If we keep funding aside and just see the time frame (in years) then you will find that growth in the valuation of these 4 Indian start-ups is very much in line with the Top 4 global start-up valuations or we can say behind them (in terms of multiple rises).  Though this valuation game has not been the same over these years. Well, a major upward trend started happening in the start-up ecosystem from 2014 onwards. The most important point to emphasize here is that the Indian start-up ecosystem is not different from the world at least in terms of valuation growth. In fact, if you look at the valuation multiple, then global start-ups are way ahead. Please look at the numbers below:   

Valuation 2

Flipkart valuation was ~15 bn in 2015 but suddenly dropped to $5 bn in 2016, current Flipkart valuation is $37.6 bn

Byju’s valuation in 2016 was just $0.27 mn and then in just 3.5 years it turned $8 bn and today its valuation stands at ~17 bn

Paytm valuation in 2015 was $2.3 bn and then it soared ~5 times to reach 10bn in 2018 and is currently valued at $16 bn

Oyo valuation in 2015 was just $400 mn but it soared to $5bn in 2018 but after the pandemic, it just managed to reach $9 bn in the current year.

Now just compare it with global top start-ups which have scaled up substantially over the years:

 Bytedance valuation was just $0.5 bn in 2014 then it turned $10 bn in 2016, $78 bn in 2018, and now it’s currently valued at ~$250 bn

Stripe valuation stood at $1.75 bn in 2014 which increased to ~$10 bn in 2018 and now current valuation stands at $95 bn

Instacart, the world most valuable food delivery company was at the valuation of $380 mn in 2014, the valuation rose to ~8 bn in 2018 and have the current valuation of $39 bn in 2021

Epic Games, which has a valuation of $1bn in 2014, saw a 14X increase in its valuation in 2018 to reach $14 bn and the current valuation stands at $28.7 bn

I know it’s not an apple-to-apple comparison but logic is to understand the movement. Frankly, the difference is huge, definitely, multiple factors play in the calculation of valuations but still there is no reason why we question the soaring valuation of Indian start-ups when globally valuations are going up at a much faster pace.


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