Valuation of startup firms: a case study on Pathao

Abstract

The article discusses the concept of startups, their sources of financing, and the stages of funding such as seed capital, Series A, and Series B financing. It further explains different startup valuation methods including the Cost-to-Duplicate Approach, Market Approach, Discounted Cash Flow (DCF) Approach, and Development Stage Approach. Using Pathao as a case example, the study demonstrates how startup valuation differs from traditional company valuation due to uncertainty, limited historical data, and future growth potential.

Additionally, the paper analyzes how Pathao successfully raised investments from local and foreign investors, including funding from Go-Jek. The study also explores Pathao’s future expansion plans, digital payment initiatives, and challenges such as competition, regulatory pressure, customer expectations, and safety concerns. Overall, the case study provides valuable insights into startup financing, valuation techniques, and the growth potential of technology-based businesses in emerging economies like Bangladesh.