4990 - Delivic Valuation Report
4990 - Delivic Valuation Report
4990 - Delivic Valuation Report
As of 2022-09-20
Contacts:
Farzad Mojahedi rezaeian
Report generated on 25 Oct, 2022 farzad@delivic.my
Table of Contents
Company summary 3
Forecasts summary 4
Current ownership 5
Valuation 6
Use of funds 8
Qualitative methods
Scorecard Method 9
Checklist Method 10
Qualitative traits summary 11
VC method 12
DCF Methods
Financial Projections 15
Conclusion 19
Appendix 20
Company summary
Delivic Trading Sdn Bhd
G-37, Jalan sp5/1, Taman Serdang Perdana, 43300 Sri Kembangan, Selangor, MALAYSIA
Malaysia
Honey, Premium Gift & Hamper Ice Cream & Juice, Delights Incorporated: Yes
Year of incorporation: 2016
http://www.delivicpremium.com
Founders' committed capital:
RM500000
Opportunity Latest operating performance
09/2021 - 08/2022
Business model: B2C
Scalable Product: No Revenues 2,469,181 -
Exit strategy: Some exit opportunities
EBITDA 45,181 -
Ebitda margin -
All numbers in RM
/// More information on the history, milestones, team, etc., (e.g. pitchdeck) can be requested by the company
Forecasts summary
Future profitability
Revenues Costs EBITDA
40.0M
30.0M
20.0M
10.0M
0.0
-10.0M
09/2022 - 08/2023 09/2023 - 08/2024 09/2024 - 08/2025 09/2025 - 08/2026 09/2026 - 08/2027
Cash forecast
Cash in hand Free cash flow to equity
10.0M
8.0M
6.0M
4.0M
2.0M
0.0
-2.0M
09/2022 - 08/2023 09/2023 - 08/2024 09/2024 - 08/2025 09/2025 - 08/2026 09/2026 - 08/2027
/// Full profit and loss and cash flow forecast at page 14.
Current ownership
Here is an overview of the current shareholders in the company. More information on type of shares, unassigned shares, and in
general a detailed cap table can be requested to the company in question.
80% Founder #1
20% Shareholder #2
Valuation
The pre-money valuation displayed below is the result of the weighted average of different methods. The use of several
methods is a best practice in company valuation, as looking at the business from different perspectives results in a more
comprehensive and reliable view.
These methods are compliant with IPEV (International Private Equity Valuation) Guidelines and each of them will be explained
in more detail in the following pages of the report.
More information on the weights can be found in the Appendix.
Pre-money valuation
Low Bound High Bound
RM 14,029,000 RM 15,789,203 RM 17,549,000
5 Valuation Methods
Method weights
Pre-money valuation
Low Bound RM 15,789,203 High Bound
RM 14,029,000 RM 17,549,000
Capital needed
12.48% RM 2,000,000 10.23%
11.24%
Post-money valuation
Low Bound RM 17,789,203 High Bound
RM 16,029,000 RM 19,549,000
Starting from the post-money valuation of the company, the equity percentage that relates to the investment is calculated as
investment/post-money valuation. Keeping the investment amount fixed, the lower the pre-money valuation, the higher the
equity stake, and vice versa.
Use of funds
Here is a breakdown on how the company will use the capital raised.
Capital expenditures:
RM 1,330,000 (67 %)
Operations:
RM 202,000 (10 %)
Inventory:
RM 218,000 (11 %)
Sales and marketing:
RM 85,000 (4 %)
Not allocated: Others:
RM 10,000 (1 %) RM 140,000 (7 %)
Product and R&D:
RM 15,000 (1 %)
Qualitative methods
Scorecard Method: RM 30,572,787
This method was conceived by William H. Payne of Ohio TechAngels group and endorsed by the Ewing Marion Kauffman
Foundation. The valuation of the startup depends on how different this is from the assumed average of a set of comparable
companies from the same region.
Startups’ qualitative traits are divided in 6 criteria, compared with the assumed traits of the average company, and given a
score according to whether it over- or under-performs the assumed average company. These scores are multiplied by weights
that represent the impact of the criteria on the valuation. The sum of these weighted scores multiplied by the average valuation
leads to the company’s pre-money valuation.
Parameters
Average valuation (Malaysia): RM 18,959,868
/// Please see appendix for data sources, defaults, and breakdown of the traits
14.0M
13.0M
12.0M
11.0M
10.0M
9.0M
8.0M
7.0M
6.0M
5.0M
4.0M
3.0M
2.0M
1.0M
0.0
Parameters
Maximum valuation (Malaysia): RM 44,800,000
Quality of the core team: RM 13,440,000 (30%) Strategic Relationships: RM 6,720,000 (15%)
Quality of the Idea: RM 8,960,000 (20%) Operating Stage: RM 8,960,000 (20%)
Product roll-out and IP protection: RM 6,720,000 (15%)
/// Please see appendix for data sources, defaults, and breakdown of the traits
Team Network
Founders Board of advisors: Advisors not organized in a board
Time commitment: Full time Legal consultants: Yes
Average age: More than 45 Current shareholders: Friends and Family
Founded other companies before: Yes, with successful exit(s)
Market Product
Total Addressable Market (TAM): RM 264,375,000,000 Product roll-out: Already to Market
Annual growth rate of the market: 4.76 % Feedback received: Mainly positive
Demand validated: Demand validated by competitors Loyalty to the product/service: Average retention
Internationalization: Local focus now, international expansion Partners: Contracts with key strategic partners signed and serving
planned high volumes
Competition Protection
Level of competition: Dominated by several players Barriers to entry of the market: Modest
Competitive products are: Good Applicable IP: Trademark and/or domain names
Differentiation from current solutions: Not comparable solutions
International competition: Not yet developed
VC Method
Premoney Valuation: RM 5,107,062
The VC (Venture Capital) method is one of most common approaches among financial practitioners in the private company
market. The startup is given the valuation that will grant investors a predetermined return at the exit.
The potential exit value of the company is computed with an industry-based EBITDA multiple. The valuation is equal to this
value discounted by a required ROI (Return On Investment). This depends on the startup’s stage of development, higher for
early stage riskier companies, lower for more mature ones. It is the minimum rate that will allow investors to have positive
returns from portfolios where most companies fail and gains come from a selected few.
6.0M
5.5M
RM 5,692,570
5.0M Last Year EBITDA
4.5M
4.0M
3.5M
3.0M
EBITDA
2.5M 9.05
2.0M EBITDA multiple
1.5M
1.0M
500.0K
RM 51,496,273
Last Year Exit value
0.0
-500.0K
-1.0M
48.60 %
-RM 807,220 RM 454,040 RM 1,694,330 RM 5,397,390 RM 5,692,570
Annual Required
ROI
09/2022 - 09/2023 - 09/2024 - 09/2025 - 09/2026 -
08/2023 08/2024 08/2025 08/2026 08/2027
RM 7,107,062
Post-money Valuation
Parameters RM 2,000,000
Industry Multiple: 9.05 Capital needed
RM 5,107,062
Premoney Valuation
DCF Methods
The DCF (Discounted Cash Flow) methods represent the most renown approach to company valuation, recommended by
academics and a daily tool for financial analysts. The valuation is the present value of all the free cash flows to equity the
startup is going to generate in the future, discounted by its risk.
These methods weight the projected free cash flow to equity by the probability the startup will survive. Then, the flows are
discounted to present by a rate that represents risks related to industry, size, development stage and profitability. Lastly, an
illiquidity discount is applied to the sum of the discounted cash flows to compute the valuation.
The value of cash flows beyond the projected ones is represented by the TV (Terminal Value) and the way it is calculated is the
difference between the following two methods.
4.0M
RM 3,235,570
Free cash flow to equity
3.0M
Last year FCF to equity
2.0M
1.0M
0.0 2.50 %
-1.0M Long term growth
-2.0M
10.43 %
Discount rate
25.57 % RM 14,261,478
Illiquidity discount Premoney Valuation
Parameters Long term growth: 2.50 % Discount rate Survival rates Year 4: 74.64 %
Illiquidity discount: 25.57 % Risk free rate: 3.93 % Year 1: 92.13 % Year 5: 70.09 %
Beta: 1.21 Year 2: 85.48 %
Market Risk Premium: 5.39 % Year 3: 79.72 %
RM 5,692,570
6.0M Last Year EBITDA
5.0M
4.0M
3.0M
2.0M
1.0M
9.05
0.0
EBITDA multiple
-1.0M
-2.0M
10.43 %
Discount rate
25.57 % RM 17,340,238
Illiquidity discount Premoney Valuation
Parameters EBITDA multiple: 9.05 Discount rate Survival rates Year 4: 74.64 %
Illiquidity discount: 25.57 % Risk free rate: 3.93 % Year 1: 92.13 % Year 5: 70.09 %
Beta: 1.21 Year 2: 85.48 %
Market Risk Premium: 5.39 % Year 3: 79.72 %
Financial Projections
Profit & Loss
The profit & loss projections are displayed below. Data about revenues and operating costs are provided by the company.
Depreciation and amortization, interest, and taxes are either provided by the company or estimated by Equidam. Please consult
our methodology document for more details.
All numbers in RM
All numbers in RM
Cash Flow
The cash flow projections are displayed below. Capital expenditure, debt at the end of the year, and equity fundraising are
provided by the company. Account payables, account receivables, inventory and D&A are either provided by the company or
estimated by Equidam based on the average percentage of revenues for public companies in the company's industry.
All numbers in RM
Cash Flow
09/2025 - 08/2026 09/2026 - 08/2027
All numbers in RM
Conclusion
Legal Notes
Equidam Valuation SL does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other
information displayed or distributed through this report or its website. The estimates and the data contained herein are made
using the information provided by the user, publicly available information and data for different industries. Equidam Valuation
SL has not audited or attempted to confirm this information for accuracy or completeness.
Under no circumstances the present report is to be used or considered as an offer, solicitation, or recommendation to sell, or a
solicitation of any offer to buy any security. Equidam Valuation SL excludes any warranties and responsibilities concerning the
results to be obtained from the present report nor their use and shall not be liable for any claims, losses or damages arising
from or occasioned by any inaccuracy, error, delay, or omission, or from use of the report or actions taken in reliance on the
information contained in it. The use of this report and the information provided herein is subject to Equidam Valuation SL online
Terms of Use [https://www.equidam.com/term-of-use/ [https://www.equidam.com/term-of-use/] ] and Privacy Policy
[https://www.equidam.com/privacy-policy/ [https://www.equidam.com/privacy-policy/] ].
Appendix
Weights of the methods
The default weight of each method is determined by Equidam based on the stage of development, and they are shown below.
They can be manually adjusted by the company.
Stage of development Checklist Method Scorecard Method VC Method DCF with LTG DCF with Multiples
• Qualitative information is more important in early stage companies, where performance uncertainty is extremely high, so
qualitative methods are weighted in more
• The investors' view is equally important across all stages, so the weight of the VC method does not change
• Quantitative information is more reliable in later stages, when a company already has a proven financial track record.
Therefore, it is possible to use the DCF methods more extensively as projected results get founded in past performance
Qualitative methods
Default average and maximum valuations data sources
Dataset: Pre-money market valuations from transactions in the last 30 months of company in all industries, all countries,
and at seed funding stage
Datasource: Crunchbase
Usage: Computation of average and maximum (net of outliers) pre-money valuations in given geographic areas for the
qualitative methods (Scorecard and Checklist respectively)
Update: Biannual
Scorecard Method
Default weights of the criteria and breakdown in their traits
Time commitment of the founders Estimated revenues in the third year according to the stage of the
Number of employees development
Team spirit and comradeship Estimated size of the market in three years
Years of industry experience of the core team Geographical scope of the business
Business and managerial background of the core team
Strength of the relationships with key strategic partners Capital required according to the stage of development
Checklist Method
Default weights of the criteria and breakdown in their traits
Stage of development
Current profitability
VC method
Below the sources of the valuation parameters used in the VC Method: EBITDA Multiple and Annual Required ROI, and their
default values provided by Equidam
EBITDA multiple
Description: Enterprise value on EBITDA multiples computed over a dataset of global, publicly listed firms organized by
industry
Update: Annual
Notes: We favor the use of EBITDA multiple, as we believe revenue multiples fail to capture the ability of startups to
generate cash flow, i.e. the ultimate determinant of value.
The default annual required ROI rates are determined by Equidam based on the returns investors require for companies at
different stage of development, and are shown below. They can be manually adjusted by the company.
DCF Methods
Below the sources of the valuation parameters used in the DCF Methods: Discount Rate, Survival Rates and Illiquidity
Discounts, and their default values provided by Equidam.
Discount rate
Update: Bi-annual (but more frequent if macroeconomic conditions are more volatile)
Notes: For the Eurozone we apply the German 10Y Bond rate
Industry betas
Description: Industry beta computed over industry specific portfolios of global, public listed companies (same as in EBITDA
multiple)
Update: Annual
Description: Country based total equity risk premium as implied in the previous 12 trailing months.
Update: Biannual
Survival Rate
Dataset: Country-level survival probabilities of the latest cohort of companies with three years of data available.
Datasource: European Office of Statistics (http://ec.europa.eu/eurostat), U.S. Bureau of Labor Statistics (https://www.bls.gov/),
specific academic research and public offices of statistics for different countries.
Update: Annual
Illiquidity discount
The default illiquidity discount is assigned based on current profitability and projected revenues, according to the approach
suggested by William L. Silber.
Dataset: Global, publicly listed companies organized by industry (same as in EBITDA multiple)
Update: Annual
Notes: The value is winsorized over a 0% - 2.5% range. We do not want the long term growth to be above world GDP
growth expectations, as it would mean the company is going to overgrow world economy at some point in time
Other Food Retail & Distribution default long term growth: 2.50
Update: Annual
Notes: We favor the use of EBITDA multiple, as we believe revenue multiples fail to capture the ability of startups to
generate cash flow, the ultimate determinant of value.
09/2021 - 08/2022
All numbers in RM