The stock market has completed the operational framework to list startups, the Listing Deputy of Iran Fara Bourse, the junior equity market, said.
“Now there is no barrier to listing startups,” Hojjat Esmaelzadeh told IRIB news website.
“The guidelines for listing such companies are now in place,” he added, noting that the lack of a well-define operational structure had impeded startups from going public.
“Three startups have applied to list and the IFB is reviewing their applications,” he said. One venture has completed the preliminary listing process and will make stock market debut in the near future.
Startups have faced major hurdles in joining the bourse, one being that their assets could not be identified and assessed precisely.
Unlike other listed companies that own tangible assets, startups are largely intellectual property and brand names, which apparently cannot be evaluated under normal valuation procedures.
However, it appears such firms are gradually overcoming the hurdles. "In terms of meeting IFB listing norms, startups have made improvement in the past three years," Amir Hamouni, the IFB head said earlier.
He added that many companies have met key requirements related to financial performance and disclosure of business information.
The government has always welcomed the entry of startups to the bourse and also said it will support them given the gradually increasing role of startups in the economy.
Support for tech firms are aimed, among other things, at curbing Iran's dependence on oil export, developing the technology ecosystem and creating jobs.
Startups raise funds from stock market indirectly primarily through venture capital funds (VC). Ten VCs are operating in Iran’s stock market.
VC is a form financing instrument that investors provide to startup companies and small businesses that have long-term growth potential, or to companies that have grown quickly and appear poised to xpand.
Venture capital generally comes from big investors, investment banks and diverse financial institutions. VCs in Iran largely operate in areas such as fintech, nanotechnology, health and pharmaceuticals.
