Vice Presidential Office for Science and Technology and its affiliate, Iran National Innovation Fund, are seeking to mobilize more financial resources for the growing technology ecosystem, as they maintain that the current volume of lending and grants are insufficient.
During a Wednesday meeting in Tehran on broadening support for fledgling knowledge-based firms, Vice President Sorena Sattari said support for startups must be strengthened, IRNA reported.
The meeting was attended by Mahmoud Vaezi, the head of Iran's Presidential Office, Ali Vahdat, the INIF chief, and directors of several outstanding knowledge-based companies, along with CEOs of several local banks.
Acknowledging INIF’s generous support for tech units, Sattari said the National Development Fund has injected 10 trillion rials ($33.33 million) into INIF.
He hoped that with state support, new lines of credit will be extended to potentially strong technology teams.
Pointing to the fact that the technology ecosystem is capable of generating added value, the vice president said, “The startup ecosystem has created a knowledge-based economy in the past seven years. Currently, 41 technology companies are listed in the stock exchange with a net value of 250 trillion rials ($833.33 million), which earned 1.2 quadrillion rials ($4 billion) in the last Iranian year (ended March 19, 2020).”
Stressing that this is an amazing accomplishment, Sattari noted that investment in domestic tech potentials is the only practical solution to reduce the country’s dependency on oil-based revenues and foreign suppliers of high-tech products.
He also underlined that such pre-vetted startup investments should be encouraged in the largely conventional banking system of Iran.
Also speaking at the meeting, Ali Vahdat said knowledge-based companies and tech firms have had significant growth, especially in the past two years and this is thanks to the support of the banking system.
He noted that INIF was established by the government in 2013 with an initial investment of 30 trillion rials ($100 million).
“The amount was sufficient for the handful of knowledge-based units then. However, the continued support of the growing number of tech units, which are extending assistance in a wide range of fields, depends on injecting money into the fund,” Vahdat added.
As per the law, the government is required to allocate 0.5% of its annual budget to INIF.
Vahdat emphasized that with a meager amount of bad debts, startups and tech firms are ideal clients for banks in the face of economic headwinds facing the country these days.
He hoped that with the government’s cooperation, support to the potential technology ecosystem will continue.
State Support to Tech Ecosystem
Providing multidimensional support to the technology ecosystem has been high on the government’s agenda since President Hassan Rouhani began his first tenure in 2013.
The vice presidential office and INIF have been loyal supporters of tech firms and knowledge-based companies ever since.
With the outbreak of the novel coronavirus in Iran in mid-February, the financial aid was mainly directed at tech units working in related fields.
In late April, Iran National Innovation Fund invested 140 billion rials ($466,000) in nanotechnology firms to boost the domestic production of health protective items used for stemming the transmission of Covid-19.
According to the fund’s website Inif.ir, Iran Nanotechnology Innovation Council helped INIF sign contracts with eligible knowledge-based companies.
Mohammad Ali Bahreini, the head of Nano-Fund Department at the council, said the contracts are geared toward the production of N95 and N99 facemasks needed by the medical staff to fight the Covid-19 outbreak.
The money was also to be spent on upgrading machinery, especially electrospinning machines, used in the production of masks.
Electrospinning is a fiber production method that uses electric force to draw charged threads of polymer solutions or polymer melts up to fiber diameters to the tune of some hundred nanometers.
The method has the potential to produce seamless non-woven items by integrating advanced manufacturing with fiber electrospinning. This would introduce multi-functionality (flame, chemical and environmental protection) by blending fibers into electrospin-laced layers in combination with polymer coatings.
Besides the investment, INIF announced in mid-March plans to pay 45 trillion rials ($150 million) in loans to knowledge-based companies and tech firms to boost their operations.
According to Vahdat, the move was aimed at increasing the production of health-protective items needed during the pandemic, including N95 respirator and surgical masks, hand sanitizers, disinfectants, medical air disinfectant machines, antibacterial fabrics and coveralls for hospital use, as well as test kits and simulators.
Vahdat said there are over 400 knowledge-based firms working on anti-coronavirus products, some of whose fields of activity had nothing to do with the disease.
“Their rapid business adjustment to the ongoing issues in the country is praiseworthy,” he said.
Grants and Loans
Apart from the vice presidential office’s direct financial aid to startups, local banks have also extended resources to the emerging sector.
According to the Central Bank of Iran, tech-based firms received 36.6 trillion rials ($122 million) in the form of low-interest loans during the first quarter of the current fiscal year (March 20-June 20).
The loans have been offered to 484 tech units and knowledge-based companies, averaging 76 billion rials ($253,300) for each applicant.
The figures illustrate the fact that the Iranian government is going the extra mile to support the tech ecosystem, because of which the amount of financial aid offered to knowledge-based companies and startups has seen a significant %95.5 rise compared to the year-ago period.
The state support has also been extended to fledgling tech businesses affected by the novel coronavirus that spread across the country in mid-February.
In early August, Iran’s Ministry of Communications and Information Technologies reported that Iran has extended stimulus worth 1.24 trillion rials ($4.13 million) to virus-hit tech units.
Based on the report, around 72% of Iranian startups and tech businesses have been severely impacted by market stagnancy caused by the spread of Covid-19.
Officials believe that the pandemic cannot be controlled without utilizing the potentials of the tech ecosystem.
The country’s knowledge-based economy, which has currently grown significantly, is being helped by young entrepreneurs and tech teams to withstand the negative effects of the disease.
