State-affiliated Iran National Innovation Fund has lent 50 trillion rials ($201.61 million) to knowledge-based businesses in the current Iranian year (ending March 20).
Ali Vahdat, the head of INIF, said depending on the scale and field of activity of startups, low-interest loans worth 500 billion rials ($2 million) were paid, according to the fund’s website.
“These firms have matured to the point that they know how to invest the money into their development,” he said.
“INIF also held weekend events during which startups introduced their products and achievements to attract private investors. If they raise 20% of the money they need, the fund pays the remaining 80%.”
According to Vahdat, the strategy would curb the state’s role in financing the startup ecosystem and help firms become more independent of state support.
INIF has hosted 20 such events during the past 11 months, connecting 125 startups with 300 investors.
“To date, over 25 startups have raised a total of 340 billion rials [$1.37 million] during these events,” he said.
“The fund is turning the startup weekends into regular gatherings for tech firms seeking growth. A growing number of tech enthusiasts and talented students are attending these events.”
Bank Loans
In addition to INIF support, 763 startups and knowledge-based companies have received 191 trillion rials ($770.16 million) in loans from local banks during the first nine months of the current fiscal year.
Based on the latest report by the Central Bank of Iran, the amount has increased by 128% compared with the same period of last year.
The data show Bank Saderat Iran has loaned 35.3 trillion rials ($143.14 million) during the period, which is the highest amount lent by domestic banks. Bank Mellat with 33.2 trillion rials ($133.87 million) and Bank Melli with 30.5 trillion rials ($123 million) followed.
The months ending Sept. 21 and Dec. 20, 2020, were the busiest for the banks, with 37.7 trillion rials ($152 million) and 30.1 trillion rials ($121.37 million) paid as loans respectively.
CBI Governor Abdolnasser Hemmati earlier said if startups and knowledge-based companies receive enough support and attention, they will yield valuable results.
He added that state support for tech units will continue in order to ensure their constant growth.
“The technology ecosystem is expanding and will soon claim a large share of the domestic economy,” he said.
Officials believe that tech firms’ revenues will ease the domestic economy’s dependence on oil incomes.
Extending support to new startups and technology firms has been on the government’s agenda since 2013, when President Hassan Rouhani began his first term in office.
Tech Earnings
Officials believe that support for the technology ecosystem has already paid off, proving that efforts have been made in the right direction.
Mohammad Sadeq Khayyatian, an official with INIF, said earlier that the revenue of Iranian tech firms and knowledge-based companies exceeded 1.2 quadrillion rials ($4.68 billion) in the first 10 months of the current fiscal year (started March 2020).
He noted that the income shows a 40% rise year-on-year and is estimated to reach 1.5 quadrillion rials ($5.85 billion) by the current fiscal yearend (March 20).
Attributing the jump partly to the sudden outbreak of the novel coronavirus disease in February 2020, the INIF official said the technology ecosystem has boosted the production of health and medical products to ward off the virus.
“Surveys have shown that 1,418 knowledge-based companies in Iran are focused on information and communications technologies, 1,267 on machinery and equipment, and 1,111 on electrical and electronic products,” he added.
Khayyatian explained that the government’s next year plan for supporting knowledge-based companies envisages tax and customs duty exemption, issuance of commercial license, social security fee cut, military service reduction and business empowerment consultations.
Boosting Export
The government is planning to help boost knowledge-based exports and make domestic industries more self-reliant.
INIF is working to realize the goal by designing a scheme that offers tech firms four kinds of support, namely loans, warranties, investments and empowerment services.
Malekifar said firms with international trade can receive financial support, foreign leasing, loans for foreign customers and other services to expand their export target market.
“Offering grants worth 800 million rials [$3,120] to firms for attending foreign expos is one of the other services offered by the fund to help tech firms develop foreign business ties,” he said.
According to the official, export centers were established in China, Azerbaijan, India, Iraq and Kyrgyzstan last year, which turned out to have high capacity for introducing Iranian high-tech products to the target market.
“After opening tech hubs in Kenya late January and in Syria last week, officials are in talks to open similar centers in Afghanistan, Qatar and Oman,” he added.
Malekifar said export centers provide tech firms with shared working space, the opportunity to employ local professionals for marketing, promotion of their products in small-scale exhibitions, market analysis and sales consultancy, while deploying commercial teams to introduce the firms and attract customers.
