Iran Fara Bourse says the collective value of funds raised by authorized crowdfunding platforms has exceeded 10 trillion rials ($20.3 million), which was its initial target.
According to a press release published on the IFB website, 18 crowdfunding platforms are licensed by IFB and are operating within the framework of the guidelines approved by the High Council of Stock Market.
Most of the funds raised through this method have a maturity of approximately one year, and the funds are mainly directed toward production projects related to machinery and equipment, medical instruments, pharmaceutical and cosmetic products, chemical industries and tech companies.
Iran Fara Bourse has also utilized this financing method for philanthropic purposes as part of its social responsibilities.
In 2019, during the outbreak of the Covid-19 pandemic, IFB used crowdfunding to raise resources for the Ministry of Health and Medical Education. Similarly, in 2022, following the damages caused by the Khoy earthquake, the exchange initiated the collection of funds to assist the earthquake-affected residents of Khoy.
Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business. It provides easy accessibility of vast networks of people through social media and websites to bring investors and entrepreneurs together with the potential of promoting entrepreneurship by expanding the investor pool.
Rules for crowdfunding in Iran were announced in August 2018.
IFB officials had earlier said crowdfunding got attention since its inception, noting that several companies have applied to launch a crowdfunding platform.
In the winter of 2020, the first company started to collect funds for one of its projects using crowdfunding. Now, two years on, it has implemented more than 180 projects of different economic enterprises.
IFB was established in 2009 as an over-the-counter market for securities and other financial instruments. The exchange is regulated by the Securities and Exchange Organization. It is a multi-commodity center trading in a wide range of items, namely securities, including equity, debt and Islamic instruments.
It has announced plans to create two new markets this year, including one for knowledge-based enterprises.
Mohammad Ali Shirazi, the CEO, recently said that development of a knowledge-based economy is no longer a convenience, but a compulsion.
“The exchange has two main markets, namely the first and second markets that have listed more than 170 companies, 14 of which are knowledge-based," he added.
The measure comes as the government is pushing for the expansion of knowledge-based firms and effective innovation. Iran has been striving to promote the knowledge-based economy and boost innovation and entrepreneurship in recent years.
The country aims to increase the share of knowledge-based products in the economy and promote technology-based startups.
Shirazi said currently, 21 venture capital and private equity funds are active in IFB with a total investment of 3.4 trillion rials ($80 million).
"We ended last year with the acceptance of a venture capital fund worth 500 billion rials [$12 million] and started the new year with the acceptance of a knowledge-based company in the food sector, which we hope will be a prelude to a good year for improving ties with knowledge-based companies," he said.
VC is a form of private equity and a financing instrument that investors provide to startup companies and small businesses that are believed to have long-term growth potential, or to companies that have grown quickly and appear poised to expand.
A private equity fund is a pooled investment scheme used for investments in equities. Institutional and retail investors provide capital for the private equity, and capital can be utilized to fund new technology, expand working capital and bolster balance sheets.
