The innovation market was created with the aim of facilitating the entry of startups into the capital market.
According to Iran digital economy annotation, now the investment field activists have different views on this market, some of them consider innovation to be a continuation of the unsuccessful path of the SME market, and some believe that one should be more patient in judging innovation, and if The supervisory body should accompany startups, the future of this market is bright. But in the end, it seems that until the macroeconomic infrastructure does not accompany Iran’s start-up ecosystem, innovators will not face special luck from the activists of this field.
While it seemed that after Tapsi’s entry into the capital market, the government’s green light has been given for startups to enter the stock market, but more than a year has passed since this happened and no other startup has entered the capital market. In practice, the playing field of stock markets and startups is still not smooth.
Until almost a month ago, whispers were heard about the establishment of a new over-the-counter market. A market that was created with the aim of facilitating the entry of startups for the initial offering and seeking to facilitate the acceptance of startups and knowledge-based companies in the stock market. The market that is supposed to be the Iran Technology Exchange according to the 7th plan.
Harkat aval: We hope that innovators will not suffer the fate of SMEs
Amirsina Jirofti, Vice President of Harkat Aval Investment, says: Currently, the innovative market does not seem to be a promising market, I am saying this based on past experiences such as the SME market. Because the issue of entering businesses into the stock market is one issue, and the more important issue is the liquidity of their shares.
The SME market also failed because the marketability issue was not given much attention, and for this reason, more mature companies often prefer to enter the main market instead of entering the innovative market. When there is no serious buyer for this market, being in this market does not create an advantage.
Jirofti, the vice-president of the first investment, continues: the volume of transactions in the stock exchange in the country is not high, and therefore the liquidity is not at a high level. It is possible to convert shares into cash in a short time. Accordingly, limiting this market for start-up businesses in the form of an innovative market reduces this liquidity even more. Because professional capital market investors are more eager to invest on the main boards of the market because they believe that there is stronger supervision in this sector.
According to Jirofti, start-ups do not have the enthusiasm of the past to enter the stock market. He explains: Of course, part of this enthusiasm was also emotional; Because startups have now realized that the process of entering the stock market is not necessarily a guaranteed path to success and nothing extraordinary happens after the IPO.
In addition to these startups have faced the reality of the market in these years and have realized that the valuation in the capital market is based on supply and demand only and this market will not yield to the sometimes irrational valuations of startups. Capital market actors are different.
Either the path to IPO should be opened and the invested money should return to the startup ecosystem with a good return, or if the IPO does not happen, the entire startup ecosystem of the country will fail.
He continues: On the other hand, entering the stock market is accompanied by increased supervision, disclosure of business income and expenses, and compliance with the requirements of the capital market, which can be challenging for businesses that have not faced these issues before.
Indeed, it is why startup businesses that have gone through many problems and obstacles and have been able to achieve significant income and profits, will not have the necessary motivation to enter markets such as the innovative market that does not provide them with significant marketability. . In other words, startup mega-companies are ready to face the challenges of becoming an IPO when they can be tradable on the main stock exchange or over-the-counter boards, not boards such as the innovation market or the board of SME companies.
Solution: decision-making institutions should put aside fear
According to Jirofti, the solution to this problem is to abandon the fear of decision-making institutions in this area. He says: Finally, fears should be put aside so that the IPO process of startups can happen on the main boards of the capital market. In the world, we have experienced the exit of investor companies often through IPO.
But in our country, this issue has become difficult due to the challenges of entry of new companies into the capital market. In my opinion, there are two different scenarios facing Iran’s startup ecosystem in the next four to five years: either the path to IPO should be opened and the invested money should return to the startup ecosystem with a good return, or if the IPO does not happen, the country’s entire startup ecosystem will fail.
Because previous investors cannot withdraw their money from businesses and potential investors will not want to enter the country’s startup ecosystem due to lack of liquidity. For this reason, in the first move, we are trying to prepare the preparations for their entry into the main boards of the capital market and put them on the path to stock exchange.
Firouzeh: Investors in the technology field are different from other fields
Radman Rabiyi, Vice President of Innovation and Digital Economy of Firouzeh Financial Group, says: I think it is too early to judge the innovative market. But if I want to look at this issue from the current perspective, I believe that this market can be a great opportunity due to the possibility of liquidity and capital supply that it provides for companies. We at Firuzeh Group welcome the formation of this market.
The SME market failed to meet expectations due to its limitations, but at this point, it seems that those limitations are not included in the innovative market.
He also continues: the more the number of companies entering this market, the more optimistic we can look at the issue. We at Firouze Group pay special attention to this point and we hope to be able to benefit from the opportunity created for subsidiary companies active in the field of technology.
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