2025-08-11

Valuing a Bootstrapped Startup With No Revenues  But High Traction

Case Study: Valuing a Bootstrapped Startup With No Revenues  But High Traction

How do you value a company that hasn’t earned a rupee in revenue…
…but has 5 lakh app downloads, 80K monthly active users, and a strong investor waiting in the wings?

Welcome to the nuanced world of traction-led valuation.

 

The Scenario:

  •  Founder-built, B2C mobile-first platform
  •  5 lakh organic app downloads
  •  80K MAUs with consistent 5–7 min engagement
  •  No revenue yet  monetization to begin next quarter
  • Running on internal funding + initial angel round
  •  Now raising ?2 Cr pre-seed round at ?10 Cr pre-money valuation

 

 How Did We Approach the Valuation?

We combined multiple methods and made strategic assumptions:

1User-Based Valuation (Comparable Benchmark)

 Benchmark: Similar app acquired at ?300/user → Adjusted to ?125/user (given early stage)
125 × 80,000 active users = ?1 Cr indicative user value

2 Cost-to-Build Approach (Asset Replication)

  • App Dev + Tech Infra: 35–40 lakhs
  • Team effort & time cost: 25 lakhs
     Suggests intrinsic value of 60–65 lakhs

3 Venture Capital Method (Expected Exit)

  • Exit target: 100 Cr in 5–6 years
  • IRR expected: 10x return
     Today’s value = 10 Cr (pre-money), based on 20% stake for ?2 Cr

 

 Key Observations:

  • Market potential, retention data, and virality mattered more than revenue
  • Founder credibility + product-led growth was a key multiplier
  • Investors aligned with long-term vision, not current monetization

 

 Takeaway:

“Valuation in such cases is not science alone  it’s a bet on momentum, credibility, and calculated optimism.”

 

Next Up: When NAV Beats DCF  A Real Estate Holding Company Case

 

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We provide professional valuation services across the following asset classes:
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