Government officials have declared the startup ecosystem to be Iran's future business sector because it has the potential to reduce the country's reliance on natural resource sales and boost economic growth.
Over the last few years, government entities have rolled out more loan and aid packages to assist the sector's expansion.
According to ISNA, financial assistance was recently extended to startups and technology teams of North Khorasan Province.
As per an agreement signed late last week between the state-backed Iran National Innovation Fund and the provincial research and technology fund, 50 billion rials ($172,400) were allocated to help the region’s startups and tech firms grow.
According to Mehdi Khaleqi, an INIF official, the total worth of aid packages and loans paid to the tech community in North Khorasan did not exceed 7 billion rials ($24,130) in 2019, which has increased to 400 billion rials ($1.37 million) this year.
He emphasized that granting seed money to the nascent technology ecosystem is essential, if they are to boost the local economy and generate jobs.
"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.
Provincial Tech Status
Mohammad Vahidi, a board member of North Khorasan’s tech fund, said over 180 innovative teams and knowledge-based firms are currently based in the province, which have the potential to boost the local startup ecosystem and create sustainable sources of income.
The official emphasized the province’s startup growth plans, stating that in the near future, 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, over 2,000 startups in Kermanshah have received 780 billion rials ($2.6 million) of financial aid by INIF during the current fiscal year’s first seven months (March 21-Oct. 22).
According to the fund, 510 billion rials ($1.72 million) out of the total amount have been spent on forging contracts between tech firms and industrial units.
INIF has also established 198 small rural tech funds in the province since 2015 with a capital outlay of 103 billion rials ($349,000). The number of funds is planned to increase to 300.
In the western province of Lorestan, the Academic Center for Education, Culture and Research has paid 20 billion rials ($67,800) 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 government’s continuous support,” he added.
INIF 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 ($169.5 million) to knowledge-based businesses.
Ali Vahdat, the CEO of INIF, said depending on the scale and field of activity of startups, low-interest loans worth 500 billion rials ($1.69 million) were paid.
“These firms have matured to the point where they know how to invest 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.
