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Case Study 06: Fintech Startup Valuation in Hyderabad, India

fintech startup valuation in India

Background

Startup Venture F is a Hyderabad-based fintech company operating in the digital payments and payment gateway aggregation space. Founded in December 2020, the company offers a unified checkout solution that integrates multiple payment gateway providers into a single interface, improving transaction success rates and reducing customer drop-offs for merchants.

At the time of engagement, Startup Venture F was in seed stage, with growing merchant adoption, increasing transaction volumes, and a scalable B2B fintech business model. The company was preparing to raise capital to expand platform capabilities, strengthen merchant onboarding, and accelerate growth across geographies.


Engagement Objective

The promoters engaged Chunder Khator & Associates to undertake an independent valuation discovery exercise in connection with a proposed seed-stage fundraising round from institutional investors. The objective was to arrive at a fair and defensible valuation range that could serve as a reference during investor negotiations, while appropriately capturing the company’s growth outlook, fintech-specific risks, and scalability potential.

The valuation was conducted specifically for fundraising purposes, and not for compliance with any statutory or regulatory requirement.


Valuation Challenges

Valuing Startup Venture F involved addressing several complexities typical of early-stage fintech platforms:

  • Rapid revenue growth driven by transaction volumes, with evolving margin profiles

  • High dependence on technology reliability, merchant retention, and transaction scalability

  • Regulatory sensitivity inherent in payment and fintech businesses

  • Limited operating history combined with aggressive forward projections

These factors required a valuation approach that balanced growth potential with risk-adjusted realism.


Our Approach

To derive a credible valuation range, we adopted a multi-method valuation framework, triangulating value using:

  • Discounted Cash Flow (DCF) Valuation Method

  • Comparable Transaction Multiple (CTM) Valuation Method

Equal weightage was assigned to both methods, as the DCF captured company-specific projections and scalability, while the CTM method anchored valuation assumptions to observed market transactions in the fintech and payment gateway space.


Key Valuation Considerations

  1. Entity-Specific and Liquidity Risk Adjustments - For discount rate used in the DCF valuation, entity-specific risk premiums were applied to account for the non-marketable nature of the equity interest, expected dilution from future fundraising rounds, and limited exit visibility at the seed stage. Liquidity risk was explicitly factored into the discount rate applied under the DCF method.

  2. Comparable Transactions and Market Benchmarking - Comparable fundraising transactions involving B2B digital payment and payment gateway companies in India were analysed to benchmark valuation multiples and validate assumptions used in the valuation. Here's what the comps table looked like:

Company Name

Sector

Funding Round

Pre-Money Valuation (₹ Cr.)

Forward Revenue Multiple

Razorpay

Payment Gateway

Series F

~54,150

~36.6x

JusPay

Payment Gateway

Series C

~3,320

~14.0x

BillDesk

Payment Solutions

Series D

~10,749

~7.4x

Cashfree Payments

Digital Payments

Series B

~765

~2.2x

PineLabs

Payment Gateway

Series F

~17,983

~11.3x

  1. Sensitivity Analysis and Assumption Testing - Key assumptions including discount rates, terminal growth, and investor return expectations were stress-tested to assess their impact on valuation outcomes. This ensured robustness of the valuation range and transparency around key value drivers.


Outcome

The valuation exercise resulted in a defensible valuation range that balanced Startup Venture F’s growth potential with investor expectations and fintech-specific risks. The outcome provided a credible anchor for fundraising negotiations and enabled the founders to articulate valuation drivers clearly to prospective investors.


Conclusion

This case study demonstrates how a structured, multi-method approach to fintech startup valuation in Hyderabad can support informed fundraising decisions in a regulated, high-growth sector. At Chunder Khator & Associates, our valuation discovery engagements are designed to deliver clarity, credibility, and confidence, enabling founders and investors to navigate valuation discussions with a shared understanding of risk and opportunity. Our valuation services includes:

  • Valuation Discovery for Fundraise

  • Valuation Certificates for Compliance

  • ESOP Valuation

  • Valuation for Mergers & Acquisitions

  • Valuation for Financial Reporting

  • Valuation Review & Second Opinions

Read more about our valuation services here.

You can direct your queries or comments to the authors here.


Disclaimer: The material herein is provided for informational purposes only. The information should not be viewed as professional, legal or other advice. Professional advice should be sought prior to actions on any of the information contained herein. CKA is not responsible for any matter concluded by any person based on the contents of this article.

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