Iran's Biggest VCF Makes Debut at Iran Fara Bourse

EghtesadOnline: Iran Fara Bourse, Tehran's junior equity exchange, on Tuesday hosted the biggest venture capital fund (VCF).

News ID: ۷۸۶۰۳۲

17 February 2021

The VCF comprises 2.4 million units with a nominal value of 1 million rials each, putting the total value of the fund at 2.4 trillion rials ($10 million), IFB's website reported.

VCF is a form of private equity and a financing instrument that investors provide to startup companies and small businesses that are believed to have long-term growth potential, or to companies that have grown quickly and appear poised to expand.

Venture capital generally comes from big investors, investment banks and diverse financial institutions. VCFs in Iran largely operate in fintech, nanotechnology, health and pharmaceuticals.

The fund's ticker on IFB's bulletin board is "Pishgam". Its focus will reportedly be on investment in startups that are developing their businesses, which are said to be less risky compared with investment in fledgling businesses.

The investment would range from 100 to 300 billion rials subject to the type and scale of the business, according to the VCF's managers.

“Investors have to subscribe for a minimum 1,000 units worth 1 billion rials, 20% of the sum must be reimbursed at the subscription phase,” according to Sina Hassanali-Zadeh, the VCF’s investment manager.

Currently, there are 13 VCFs operating in Iran's capital market. As per IFB regulations, 100 billion rials are required to set up a VCF, 10% of which should be put up initially. These funds by nature are not open-ended funds and must be disbanded in less than seven years.