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

3Venture 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.”

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