Government officials have declared startup ecosystem Iran's future business sector, as it has the potential to reduce the country's reliance on natural resource sales and boost economic growth.
State agencies have consequently rolled out more loan and aid packages to help the sector expand over the past few years.
According to IRNA, financial assistance was recently granted to startups and technology teams of Qazvin Province.
According to Ali Vahdat, CEO of the state-backed Iran National Innovation Fund, his organization has granted 1.47 trillion rials ($5.25 million) to help Qazvin tech teams spread their wings.
"Early this year [March 2021], INIF decided to lend 2.16 trillion rials [$7.71 million] to the Qazvin technology ecosystem. The fund will make every effort to provide the remaining 690 billion rials [$2.46 million] by the end of the current fiscal year [March 2022] in order to meet the current year's commitment," he said.
Lotfollah Siahkali, Qazvin's representative in parliament, stated that fledgling startups require 3 to 40 billion rials ($10,700-143,000) in seed money, which is not a large sum.
"Private and state investors should take high investment risks because the country's knowledge-based community has proven to be financially viable enough to recoup initial outlay," he said.
“Over 500 innovative teams and knowledge-based firms are currently based in the province's tech park and tech centers, which have the potential to boost the local startup ecosystem and create sustainable sources of income.”
Siahkali emphasized the province’s startup growth plans, stating that in the near future, Qazvin's tech authorities will be able to provide more acceleration services and facilities to the growing number of startups.
Iran has prioritized support for startups and knowledge-based businesses since 2013 and the new government has promised to continue efforts to strengthen the technology ecosystem.
Similarly, 17 startups from Kerman and Semnan provinces have received 500 billion rials ($1.78 million) in private investment during INIF's startup events in recent months.
According to Mostafa Baghdadi, a senior official at INIF, loans have been extended to 222 startup teams taking part in the events from different parts of the country.
The Academic Center for Education, Culture and Research in the western province of Lorestan has recently paid 20 billion rials ($71,400) 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
Iran National Innovation Fund planned to pay 100 trillion rials ($357 million) in loans to fledgling technology firms via banking system by March 2022.
According to the INIF CEO, the amount of allocation has been increasing in recent years, rising from 30 trillion rials ($107 million) in 2019-20 to 50 trillion rials ($178.5 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 [$35.7 million] into the fund's coffers in the coming months, as per 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,” he 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 ($10.7 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 ($178.5 million) to knowledge-based businesses.
Vahdat said depending on the scale and field of activity of startups, low-interest loans worth 500 billion rials ($1.7 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 needed capital, the fund will pay the remaining 80%.”
According to Vahdat, the strategy would curb the government’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 regular events.
