I wrote about this issue before.
Since then GrabTaxi (EasyTaxi in Malaysia) raised another round of USD 350 million. I estimate at a valuation of about USD 2 billion, or about RM 9 billion.
AirAsia has a marketcap of about RM 3.6 billion, AirAsiaX of about RM 800 million, so together these two companies are valued at about half the valuation of a four year old company, which is basically an apps.
I don't make any value judgement here, just observe something that sounds interesting and may be controversial.
Apparently Tony Fernandes also noticed the high valuation of GrabTaxi and some other "unicorns" (start-up companies valued at above USD 1 Billion). At a recent event, he mentioned:
“Essentially, we are an Internet company. We see ourselves as an Internet company. We have a tremendous amount of Internet potential,” he told the audience at Digital News Asia’s inaugural What's Next conference in Cyberjaya yesterday (Sept 29).
“More than 20% of our business comes from ancillary income,” he said.
The AirAsia Group has invested in or kicked off several ventures, such as AAE Travel (a joint-venture between AirAsia and Expedia); the Asian Aviation Centre of Excellence; Think Big Digital (a joint-venture between AirAsia and Tune Money which operates the AirAsia BIG loyalty programme); and it also has a 40% stake in Tune Money.
These are not Fernandes’ only ventures. He also owns the Tune Group which has investments in Tune Talk, Tune Hotels, Tune Protect, Tune Studios, Tune Labs (a venture company looking at tech startups), and more.
Unsurprisingly, the Internet plays an essential part in most, if not all, of these businesses. Indeed, many industry pundits have credited Tony and AirAsia for breaking down e-commerce barriers in Malaysia.
Does that mean that Tony wants an internet valuation for his company, not an airline valuation? If so, will he get that?
Time will tell.
people tend to value BIG in future rather than what actual worthy now. this is human nature. thats why TOTO company profit in most of the country.
ReplyDeleteValuation for businesses should not be computed linearly. This is especially so for start-ups which have no platform for active trading. Hence the comparison is flawed
ReplyDeleteYou are partially right. Also, we don't know exactly the conditions of the capital injections, they could be shares of a special class, with for instance liquidation preference.
ReplyDeleteHowever, I only wanted to paint a very big, rough picture, and for that, rough indications are roughly correct.
Anyhow, value is in the eye of the beholder. The beholders are investors who want to buy privately held shares in Grabtaxi and other who want to buy (or sell) shares in AA and AAX. Who will be right or wrong in the long run, time will tell .....