Next India Traveler: A Valuation Challenge
(5 pages of text)
Next India Traveler (NIT) was a travel and tour operator based in Chandigarh, India. The young start-up had been in business since 2012. It offered both inbound and outbound tour and travel packages that covered all the major tourist destinations in India and the Asia-Pacific region. NIT’s motto was to provide its clients with best-in-class services for all aspects of travel and tourism, all under one roof.
An upcoming meeting with a venture capitalist firm was crucial to NIT’s future plans for growth, and the investors would certainly want to have a clear idea of the company’s value. Thus, before making his pitch to the venture capital firm, NIT’s owner wanted to perform a valuation of his start-up. Unfortunately, the lack of long-term data and a proven methodology for valuing relatively new companies meant the owner faced a considerable challenge in terms of identifying the most appropriate model for the task.
This case can be taught in a business valuation elective in MBA and executive programs. After completing the case, students should be able to:
- Analyze the options and determine the appropriate valuation model for young growth companies/start-ups.
- Apply the model to a real-world company to determine the value of the company.
India, Small, 2015
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