The Association of Employers of Venture Capital Investment Funds and Institutions of the country published the report “Financing of Iran’s Technology and Innovation Ecosystem in 2023”. This report says that the total amount of investment contracts last year reached $61 million with an 18% increase compared to 2022. The number of investment contracts also increased again last year and reached 407 contracts after the drop in 2022.
According to Iran digital economy annotation, this year, 2,153 cases of facilities worth $112 million have been provided to businesses by the members of the association, and we have seen $9 million withdrawn from previous investments.
The registered capital of the members exceeded $172 million
In the past year, the total registered capital of members of the Venture Investment Association has reached more than $172 million. The private sector’s share of the registered capital is 64% and the non-private sector’s share is 36%.
According to this report, the members of the association increased from 16 members in 2012 and 105 members in 2022 to 151 members in 2023. More than 67% of the members of this association work in Tehran, and Isfahan with about 7% and Yazd with about 6% are in the next ranks.
Also, more than 58% of all investment contracts in 2023 were related to Tehran province. The lowest contracts were related to Khuzestan, Ilam, Kermanshah and Kurdistan. The provinces of Lorestan, Chaharmahal Bakhtiari, Kohgiluyeh and Boyer Ahmad did not have any share in these contracts. This is while all three provinces have members in the association.
In this regard, the report states: “Dispersion of the distribution of investment contracts in the geographical regions of the country has increased to some extent; So that in 2021, about 73% of investment contracts were in Tehran province, which decreased to 58% in 2023.”
The field of content production and animation has received the least facilities from investors
The most investment contracts were concluded in the fields of “machinery and equipment” (14 percent), “advanced materials and chemical technology” (13.76 percent), and “medicine, cosmetics, hygiene and medicine” (10.81 percent). The fields of “event and meeting services”, “educational and organizational services” and “cryptocurrency and digital currencies” (each 1.97%) have the lowest contracts.
In addition, more than 39% of facilities have been assigned to the field of “machinery and equipment”. The fields of “Energy and Waste” with 19.2% share and “Electricity and Electronics” with 12.9% share are ranked next. The lowest facilities are allocated to businesses in the three fields of “content production and animation”, “design and architecture” and “culture, art, news and media, entertainment and games”.
Funding through crowdfunding platforms increased 6 times
Another part of the association’s report examines the performance of the crowdfunding market in 2023. The provision of $70 million of capital and 324 successful projects were the achievements of this field last year. Comparing these statistics with last year’s statistics shows that capital provision has increased by 480% (5.8 times) in one year.
The number of platforms with OTC licenses has also reached 24, and on average, 150 investors have participated in each financing plan by the platforms. The average amount of financing for each project was $211,000.
The time to evaluate ideas was reduced from 80 days to 51 days
Among other things mentioned in this report is the reduction of the time spent on evaluating investment ideas. “The time taken to evaluate an investment idea to the first payment, which includes screening, due diligence, valuation, contract signing, and first payment, has decreased from 80 days in 2021 and 2022 to 51 days in 2023.”
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