Financial Tribune- Total sales of Iran’s six major startups surpassed 20 trillion rials ($533 million) during the past fiscal that ended  in March, said Vice President for Science and Technology Sorena Sattari.

“These six businesses will emerge as some of Iran’s largest firms in the not too distant future,” he said, addressing the 11th round of Iran Entrepreneurship Festival at the Ministry of Cooperatives, Labor and Social Welfare on May 23, Mehr News Agency reported.

He did not specify the names of the six startups, although some of the major knowledge-based firms in Iran are Zoodfood, Chilivery, Digikala, Snapp, Tap30 and Bamilo.

Minister of Cooperatives Ali Rabiei and Head of Iran Chamber of Commerce Gholamhossein Shafei were present at the event.

Given the high and rising rents for working spaces in cities like Tehran, Sattari said, “The main problem of knowledge-based business is renting or purchasing real estate for their work.”

The Presidential Office for Science and Technology has provided working space to 3,000 knowledge-based businesses, the official said.

“These firms have approximate annual sales of 300 trillion rials ($8 billion) and have created 100,000 jobs,” he said.

Sattari also addressed Iran’s education system pointing out that in recent years, “the approach of universities to education has changed and now it is more innovation and business-oriented [compared to the old system which was based on education for the sake of education].”

But primary and secondary education should also evolve in the same manner, he stressed.

The financial prospect of local knowledge-based startups has been “stunning” in the past two years. “We have seen several startups by university students with little initial investment that in a few months have grown to hundreds of thousands of dollars in value.”

Innovation Index Improves

According to the World Intellectual Property Organization on global innovation index, Iran’s innovation index has risen to 78 in 2016 from the previous year’s 120.

Addressing the critical issue of Iran’s economic reliance on oil and gas exports, the veep said oil and gas exports have a 30% share in the current fiscal budget.  For decades Iran’s economy has been over reliant on oil export income, which experts say is no more sustainable.

The government is trying to enhance the share of technology-based products and curb the oil industry’s share in the economy, Sattari said.

Referring to investments in knowledge-based companies he said, “Loans are not a preferable way for funding knowledge-based companies. A significant part of their capital should come from venture capital (VC) funds [as equity].”

Iran’s Securities and Exchange Organization (SEO) has unveiled a platform for hosting venture capital funds to help tech companies grow.

The platform was designed in cooperation with over-the-counter market Iran Fara Bourse, which will list both VC and small tech companies to help them fund their ventures.

These investment funds manage the money of investors who seek private equity stakes in startup and small- to medium-sized enterprises with strong growth potential.

Earlier in May,  speaking at the United Nation’s Commission on Science and Technology for Development (CSTD) — a subsidiary body of the Economic and Social Council —Sattari provided data on knowledge-based economic growth in Iran.

At the conference in Geneva he said, “Iranian knowledge-based businesses annually generate $9.1 billion.”