Formacar

Formacar, an innovative company in the automotive technology space, had a financial model that overestimated market size. This led to an inflated company valuation, causing difficulties in fundraising efforts.

The Challenge

• Overestimated Market Size: Inflated market assumptions skewed financial projections.
• Overvaluation: Resulted in unrealistic company valuation.
• Fundraising Issues: Investors were skeptical due to inflated valuations.

Modo Finance’s Approach

1. Model Assessment:
• Analyzed the existing financial model to identify inaccuracies in market size assumptions.
• Engaged with Formacar’s team to understand their market positioning and competitive landscape.
2. Market Size Adjustment:
• Conducted market research to derive realistic market size estimates.
• Adjusted financial projections based on accurate market data.
3. Valuation Correction:
• Recalculated company valuation using updated market size and realistic growth projections.
• Provided a clear and transparent valuation model for potential investors.

Results

• Accurate Market Size: Financial model now reflects a realistic market size, ensuring more accurate projections.
• Realistic Valuation: Adjusted valuation improved credibility with investors.
• Successful Fundraising: Enhanced investor confidence led to successful fundraising efforts.
• Strategic Clarity: Provided a solid foundation for strategic planning and growth.

Conclusion

Modo Finance’s intervention corrected Formacar’s market size and valuation, resolving fundraising challenges and positioning the company for sustainable growth. The accurate financial model now supports better strategic decisions and investor relations.