Company valuation

We’ve evaluated the company based on a combination of market potential, current progress with our MVP, and industry-standard valuation methods for startups at the pre-seed stage. Here's how we arrived at our current pre-seed valuation.

1. Market Potential (TAM, SAM, Expected Market Share)

We began by assessing the market opportunity for our app in Dubai’s health and wellness sectors. Our valuation is built upon the total addressable market (TAM), serviceable addressable market (SAM), and our expected market share over the next few years.

  • Total Addressable Market (TAM):
    The TAM for our app in Dubai is approximately $525 million, based on the city’s population and the percentage of individuals likely to use health and wellness services. This includes fitness enthusiasts, athletes, and wellness seekers who could benefit from our clinic-based services.

  • Serviceable Addressable Market (SAM):
    Of this total market, we estimate that our app can realistically reach 25%, bringing the SAM to $131.25 million. This reflects the portion of the market we can serve through our clinic and planned expansion efforts.

  • Expected Market Share:
    Over the next 3 years, we expect to capture approximately 2% of the SAM, generating projected revenue of $2.625 million annually.

By establishing a clear understanding of the market potential, we can demonstrate that there is significant opportunity for growth, and this forms the foundation of our valuation.

2. Revenue Multiple Method for Valuation

To derive a realistic company valuation based on our market potential and expected revenue, we applied a revenue multiple method, which is commonly used to value early-stage startups.

  • Projected Revenue:
    Based on capturing 2% of the SAM over the next 3 years, we estimate annual revenue of $2.625 million.

  • Revenue Multiple:
    Early-stage tech startups are typically valued at 5x to 10x their projected revenue. Given the growth potential of our product and the strong market opportunity, we’ve applied a 7x revenue multiple, which is a mid-range figure for companies in the health-tech space.

  • Valuation Calculation:

Valuation=Projected Revenue×Revenue Multiple

Valuation=$2.625 million×7=$18.375 million

This valuation reflects our potential to generate significant revenue as we scale and capture a share of the health and wellness market in Dubai.

3. Pre-Seed Stage Valuation

Given that we are still in the pre-seed stage with a working prototype (MVP), our company valuation has been adjusted accordingly to reflect current progress, risks, and the future growth potential.

  • Current Pre-Money Valuation:
    Based on the Berkus Method and comparable startups in our industry, we’ve estimated our pre-money valuation at $1.2 million. This takes into account:

    • A working prototype (MVP) that will soon be tested with real users.

    • A strong founding team with experience in the health and wellness sector.

    • The clear market opportunity we’ve identified.

  • Post-Money Valuation:
    After raising $193,000 in pre-seed funding, our post-money valuation will be $1.393 million.

4. Equity Offering

In exchange for the $193,000 pre-seed investment, we are offering 13.9% equity in the company. This equity distribution is based on the following calculation:

Equity =  Amount to Raise / Post  -  Money ValuationAmount to Raise

Equity = 193,000 /1,393 mil = 13,9%                   

This structure ensures that investors receive a meaningful stake in the company, while we retain enough equity to incentivize future growth and fundraising rounds.

Conclusion

Our company’s valuation is based on:

  • Market potential in Dubai’s booming health and wellness sector, with a TAM of $525 million and a SAM of $131.25 million.

  • Revenue projections that show the potential to capture 2% market share over the next 3 years, generating $2.625 million in annual revenue.

  • An industry-standard revenue multiple of 7x, which places our estimated valuation at $18.375 million as we scale.

  • A pre-seed valuation of $1.2 million, adjusted for our current stage and progress with the MVP.

By investing in this pre-seed round, you will receive 13.9% equity and be part of a fast-growing company with a clear path to revenue and market penetration.