Valuation Challenges for Startups in Artificial Intelligence, and Robotics

Artificial Intelligence is one of the fastest-growing technologies across the tech world. AI-based devices evolve with time, and experience to replicate human intellect. Robotics, on the other hand, aims at automating repetitive activities to increase operational bandwidth and allowing the workforce with the time and energy to think about the more productive aspects of the business.

As a futuristic technology, with enormous growth potential, AI continues to attract massive investments worth trillions of dollars. However, what confronts most business owners in the AI space is the technique through which they accurately value their company. They are in a dilemma, whether to choose an operational approach or take the strategic route.

 

The Strategic and Operational Valuation Approach

Many companies within the AI space, especially the founders, prefer the strategic approach, placing in the center, factors such as the revolutionary nature of the idea, and the corporate vision that contributed to the success of their company. On the other hand, some companies profess the significance of conventional operational valuations based on investments, acquisitions, and numbers.

While the established companies may have a lot to show and talk about when it comes to historical figures, startups have very little, or perhaps, nothing to prove in this regard. For them, it is the market potential and their growth prospects that prove instrumental while taking up valuations.

So, this is where the actual challenge is. As an evolving technology, the AI space constitutes a blend of both, the older players, and as well as newbie. Hence, the industry is unable to settle with one specific and concrete valuation approach. Nevertheless, adopting a combination of strategic and operational approaches to value AI and Robotics firms seems a better and prudent thought.

Valuation India is a team of business valuation professionals. The firm works with several reputed across multiple business domains, offering a range of valuation services for startups, and helping companies value their business through the most appropriate valuation approach.

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