Iran's Information Technology Organization has loaned 2.1 trillion rials ($7.58 million) to 341 knowledge-based companies and startups in the first half of the current fiscal year (March 21-Sept. 22).
According to Shohreh Nasseri, an official with ITO, financial aid has been paid to tech entities working on mobile games, tech infrastructural projects, online service providers, startup accelerators and fledgling household businesses, Peivast reported.
She added that the amount of loans averaged 100 billion rials ($361,000) during the period, such that 8% of total lending have been paid to cushion the effects of the Covid-19 pandemic on fledgling startups.
“With the growing number of aspiring tech teams and their rising demand for hosting, online security and digital marketing services, ITO intends to expand its multifaceted support,” she said.
"At present, ITO supports 12,000 tech teams, with the number growing by the day."
Nasseri noted that financial stimulus has been provided through ITO’s Noafarin Scheme.
“The scheme also entails non-fiscal support. There are numerous tech entities that require training and consultation in business, and they are directed to use relevant services offered by the scheme,” she said.
According to her, four private advertisement and digital marketing companies, eight private companies handling data security, five cloud computing and data processing and storage firm,s along with six accounting software developers, are currently collaborating with ITO to meet the startups’ technical requirements.
The fund was founded by ITO in May 2019 with an initial capital of 1 trillion rials ($3.6 million), with the ministry contributing 20% and the rest coming from the private sector.
The fund identifies and helps fledgling startups and tech firms in launching their businesses.
The initiative, which has served as the ministry’s arm for supporting tech firms, is expected to grow into a permanent sponsor of innovative projects and a patron of entrepreneurs.
ICT Ministry’s Loans
In line with the Noafarin Scheme’s goals, the ICT Ministry had earlier announced that it has provided 1.4 trillion rials ($5 million) in loans to startups and tech firms in the last Iranian year (ended March 20, 2021).
According to the former ICT minister, Mohammad Javad Azari Jahromi, it was the largest sum ever lent to tech firms in recent years.
“The technology ecosystem is supported by several entities, including the Vice Presidential Office for Science and Technology, which prefers to pump financial resources into well-developed tech companies and boost their activities. The ICT Ministry has taken a different approach by focusing on providing seed capital to startups,” Jahromi explained.
He noted that the startup ecosystem needs more venture capital funds than small loans, adding that Noafarin Fund has managed to invest in four startup companies, although it is only expected to provide loans.
“The state's small coffers are not a suitable resource for venture capital investments because such investments entail high risks,” he said, urging private investors to join the initiative.
Jahromi stated that the ICT Ministry has developed several digital economy parks across the country to empower tech units.
“Using the available capacities, digital economy parks in Mashhad, Semnan, Sari and Shiraz are working to increase the income of tech firms to 50 billion rials [$180,000] per year,” he said.
Tech Earnings
Officials believe that support for the technology ecosystem has already paid off.
Esmaeil Qaderifar, an official with the Vice Presidential Office, earlier said the sales of Iranian startups and knowledge-based companies reached 1.8 quadrillion rials ($6.49 billion) in the last Iranian year (ended March 20, 2020).
He added that tech firms' earnings have been rising over the past few years, reaching 1.2 quadrillion rials ($4.3 billion) in the year ending March 2019 and 1.5 quadrillion rials ($5.4 billion) in the fiscal 2019-20 from 600 trillion rials ($2.1 billion) in the fiscal 2017-18.
Qaderifar noted that the figure will continue to increase in the current year.
“The growth has been achieved despite hurdles. The reimposition of US sanctions against Iran in the summer of 2018 and the Covid-19 outbreak in February 2020 have been blessings in disguise for the technology ecosystem,” he said.
Tech firms spearheaded localization efforts while profiting from extensive state support and zero foreign competition.
The official also said Iran has over 5,700 knowledge-based companies and 1,300 startups operating in a wide range of fields.
According to Qaderifar, startups and tech companies, primarily engaged in nanotechnology, biotechnology, information and communication technologies, and aerospace, are increasingly gaining a larger share of Iran's economy.
“In addition to tech achievements in transportation, auto manufacturing, mining and steel industries, a large portion of medical and laboratory equipment have been indigenized, and 98% of medicines on the domestic market are produced in Iran,” he said.
“This is the outcome of putting faith in the young, talented generation. We expect the ecosystem to become a game-changer in the domestic economy, reducing Iran's reliance on foreign resources.”
Iran has over five million university students who are a vital element of the country's development efforts.
Qaderifar said the government and private sector should take advantage of this opportunity to invest in the young generation to maximize their potential and achieve long-term benefits.
