How we valued our company

Valuations are a complex business. Here’s how we did it

*Please note: we have responded to feedback and discounted the company valuation by 50% in a one-off adjusment for the equity crowdsale, in order to ensure an attractive offer for investors. We believe that the original valuation of £100 million remains fair and objective, built on conservative financial projections.*

A company’s valuation is the estimate of what it is worth today, taking into account its current situation and future prospects. There are three main approaches to valuing a company: asset-based, cash flow-based and an analysis of comparable companies.

How we valued BABB

Given the nature of our business, we decided the only relevant approach was the income valuation approach. We decided to carry out both a DCF (discounted cash flow) and an earnings multiple valuation.

We have built a highly detailed and extensive model from the ground up in order to determine the company value. To create this model, we had to make assumptions about factors such as our customer acquisition, overheard costs and profit margins. These assumptions are based on our business model. For the purpose of valuation, we took the most conservative assumptions in the range of possible values.

The earnings multiple valuation uses year 3 EBITDA (earnings before interest, taxes, depreciation and amortization) numbers. We used a price multiple of 3x, with a discount on the final implied equity number of 25%. You can check these numbers out for yourself in the table below.