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How Billion-Dollar Tech Startups Get Valued With Phoney Math

How Billion-Dollar Tech Startups Get Valued With Phoney Math

Not too long ago, we documented how Uber was "worth" $40bn. Soon after, Chinese tech startup XiaoMi shattered Uber's eye-gorging valuation by becoming the world's most "valuable" startup, on top of being the world's 4th largest smartphone maker.

What we didn't however touch on was how these private tech startups, a great majority of them in Europe and America, get their preposterous valuations. Specifically, we said: "Of course, because Uber is still privately held, valuations are always going to be a fishy affair."

It doesn't make an iota of sense that a ride-sharing tech startup such as Uber would have a $41.2bn price tag stuck to it; close to double what Twitter is currently worth, and on par with some of America's big names including the likes of Delta Airlines, Time Warner Cable, and just $10bn shy of General Motors.