Government officials have proclaimed the startup ecosystem Iran's future business, as it is capable of reducing the country's reliance on the sale of natural resources.
Loan and aid packages have been rolled out by state agencies over the years to help the sector.
According to IRIB News, financial aid has been recently granted to entrepreneurs in Golestan Province's Science and Technology Park.
Mehdi Ghaffari, the park's director, said the park has been granted 300 billion rials ($1 million) by the Vice Presidential Office for Science and Technology and its subsidiary Iran National Innovation Fund.
“The financial aid will be used to provide low-interest loans to small tech companies. The amount of state budget allocation to the park did not reach 90 billion rials ($325,000) last year and it was only 35 billion rials ($126,000) in 2017,” he added.
The official noted that over 500 innovative teams and knowledge-based firms are currently based in the province's tech park and tech centers in Aliabad, Bandar-e Torkman and Gonbad-e Kavous.
Ghaffari highlighted the park's growth plans, saying that in the near future, it will be able to provide more acceleration services and facilities to the increasing number of startups.
Since 2013, Iran has prioritized support for startups and knowledge-based businesses, and the new government has promised to continue efforts to further strengthen the technology ecosystem.
In line with the same move, 17 startups from Kerman, Qazvin and Semnan provinces have attracted 500 billion rials ($1.8 million) of private investment during INIF’s startup events over the past few months.
According to Mostafa Baghdadi, a senior official at INIF, the investment has been extended to 222 startup teams taking part in the events from different parts of the country.
Moreover, the Academic Center for Education, Culture and Research in the western province of Lorestan has recently paid 20 billion rials ($72,200) in loans to fledgling startups.
Amin Salahvarzian, the center’s caretaker, told reporters that over 60 startups and tech firms of the province are under ACECR’s direct patronage.
“Lorestan’s tech park and university-based tech centers now accommodate over 27 knowledge-based companies and hundreds of fledgling startups, all of which can bolster their activities with the state’s continuous support,” he added.
INIF Support
The government-backed Iran National Innovation Fund plans to pay 100 trillion rials ($361 million) in loans to fledgling technology firms via banking system in the current Iranian year (started March 20).
According to Ali Vahdat, the head of the fund, the amount of allocation has been increasing in recent years, rising from 30 trillion rials ($108.3 million) in 2019-20 to 50 trillion rials ($180.5 million) in 2020-21.
This year’s budget is 100% higher than the cumulative loans paid out last year.
In an earlier meeting with Bank Saderat Iran CEO Hojjatollah Seydi, Vahdat presented an overview of the fund’s total capital outlay for the current year.
“The government plans to inject 10 trillion rials [$36.1 million] into the fund's coffers in the coming months, according to the 2021-22 budget bill. An additional $200 million are supposed to be transferred to INIF from the National Development Fund, the sovereign wealth fund,” Vahdat said.
“The banking system will assist the institution by continuing to offer help packages to budding tech firms before the two sources send funds to INIF.”
Four local banks, namely Bank Saderat Iran, Bank Tejarat, Bank Mellat and Bank Ayandeh, will provide the expected loan sum.
Vahdat noted that Bank Saderat's share would amount to 3 trillion rials ($10.8 million).
Seydi stated that his bank is ready to extend its share of the loan and hoped that the seed capital will be of assistance to new entrepreneurs and tech companies.
“The bank plans to reduce the loan application process for Tehran-based applicants to seven days and other cities to 30 days if all necessary documents are submitted with their application,” he added.
To relieve the burden on businesses, Seydi said the financial aid would be paid without any interest.
Last Year’s Lending
Iran National Innovation Fund is the state’s arm for providing the growing technology ecosystem with financial aid.
In the last Iranian year (ended March 20, 2021), the fund lent 50 trillion rials ($180.5 million) to knowledge-based businesses.
Vahdat said depending on the scale and field of activity of startups, low-interest loans worth 500 billion rials ($1.8 million) were paid.
“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 will pay 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 in the last Iranian year, connecting 125 startups with 300 investors. The fund is turning startup weekends into regular gatherings for tech firms seeking growth.
A growing number of tech enthusiasts and talented students are attending these events.
