What is a company valuation?
Company valuation is the process of estimating what a company is worth. In unlisted companies, there is no daily market price like on the stock exchange — instead, the valuation is often based on the latest funding round, comparisons with similar companies, or cash flow analyses.
How are unlisted companies valued?
There are several methods used:
- Latest transaction price — What was paid in the most recent funding round?
- Multiple valuation — Comparison with similar listed companies' price multiples (e.g., revenue or EBITDA)
- DCF (Discounted Cash Flow) — Present value calculation of future cash flows
- Secondary market price — What the share trades for between investors
Why does the valuation vary?
Different methods yield different results, and the valuation can differ depending on who performs the analysis. This is why pricing transparency — like Accumeo's market data — is so important.