Salam from Tehran: Iran's Startup Scene
As some of you may have heard, Iran will soon have its pariah status removed. The world is expected to descend on the country's capital, Tehran, in their hordes. As international corporations prepare their "Iran-plan" and governments from all and sundry meet with their counterparts, everybody is waiting for 2016 when sanctions disappear for good – hopefully. The country's population is just under 80 million – at last count – and the Iranian capital is a large metropolis of 14 million people, roughly. Backing onto the slopes of the Alborz mountain range to the north, city dwellers of this often undersold urban setting have the pleasure of four seasons, with even snow covered mountains and skiing in the cold period.
As is often said the majority of this Middle Eastern country under 35 years old, making it one of the youngest countries in the MENA region. Education is a priority, including university with the overwhelming majority of the graduates being female. Up until recently however, this vast wealth of talent was simply emigrating to other countries as the infrastructure was not in place over the past decade.
Now it's a different story with the Iranian capital playing host to three accelerator programs backed by large local venture capital groups, these are namely, Avatech Accelerator, Dmond Accelerator and MAPS Accelerator, the latter being the oldest of the trio.
These three private accelerators are backed by at least another half dozen incubator spaces hosted by respective universities across the country. Sharif University is leading the way in keeping its bright graduates by hosting its own internal testing ground for new indigenous startups.
The Rouhani administration, elected in 2013 by landslide and liberal in its social and business outlook has got behind the fledgling startup industries in Iran, they have also taken note about how much can be achieved by supporting small companies and have contacted various ministries to set aside funds for science and technology graduates. The aim of this objective is to keep a percentage of graduates and hopefully use the technology.
The term "co-working" is still relatively new in the Iranian work environment with the local city municipalities struggling with the idea of multiple companies working under one address. In fact the word has no direct translation in the Persian language. So far, the formal co-working eco system has yet to take off with a couple of small test-bed spaces operating.
At present there are two co-working spaces in Tehran, one entirely private but not currently open to the public and another run by the owners of one of startup organizations promoters. Outside of the capital, there is another proto-co-working space in the northern city of Babolsar directed by startup evangelist Mobin Ranjbar.
Iran's startup community also has a burgeoning online media in both Persian and English, with the leading technology sites being Zoomit.ir, Digiato.ir and Webna (supported by the Iran Entrepreneurs Promotional Body).
There are also two dedicated English language startup new sites acting as the media arms of the two larger accelerators in Tehran. The first of these websites is Techly.co a website set up at the start of Iran's startup scene in 2013. The second is called Techrasa.com, a site which aims the owners have said to be the English language resource of startups in Iran.
In terms of success stories, World Startup Report published a list in 2014 of the three largest e-commerce and internet companies in 50 countries.
The report published in the Economist, suggested Iran’s leading online e-retailer similar to Amazon, DigiKala to be worth $150 million more recent figures (April 2015) put their value at over $500 million. Two other Iranian companies in the chart were Aparat.com, a Youtube clone estimated to be worth $30 million and CafeBazaar, a local version of Google's Play Store worth $20 million respectively.
In addition to this growing scene with the prospect of sanctions disappearing by January according to some estimates, international companies are likely to be moving in with their own startup brands. A recent meeting be technology professionals from Singapore suggested that Asian Accelerator companies may be interested in bringing operations to Tehran.
You cannot talk about the startup scene in Iran as if it were in a bubble. As Iran heads towards the end of the majority of the sanctions placed on it by the United States, European Union and United Nations, interest in startups by foreign investment funds and VC's is growing.
Currently only one major investment fund is backing the industry, that being Sarava Pars, a fund created by a group of forward thinking investors, in its short life the company has backed DigiKala, ANetwork and Avatech Accelorator. It has single handedly pushed forward its agenda of a pro-technology/web business leaving others trailing.
Other Iranian expatriate financial groups have also shown an interest in the country. Dmond Accelorator is backed by Plug & Play Tech Center and run by the Amidi family, who can count Paypal as one of their previous successful investments.
Other non-Iranian investment groups have also shown an interest in their country post-sanctions. At the recent EU-Iran Forum, one technology enthusiast mentioned that e-commerce sector in Iran is one of the safest bets in terms of returns and government non-interference due to its generally non-political role.
Leading Tech Startup Websites
- DigiKala.com, a local Amazon like website
- eSam.ir, a similar site based off the eBay model
- Divar.ir, a selling board, currently the most popular website in Iran
- NetBarg.com, a group buying website, currently leading the pack
- Aparat.com, a local video website hosted on Iranian servers
- Bamilo.com, a Rocket Internet backed startup taking on DigiKala
- Bama.ir, a car selling website currently leading other competitors
Daniel Khazeni-Rad works as a writer, researcher as well as business creator helping found Lord Occupational Therapy (Lordot.com) Iran's first medical startup related to home living. He currently writes for the Financial Tribune (www.financial tribune.com) newspaper as well as acting as contributing editor to Bourse & Bazaar (www.bourseandbazaar.com), an editorial site regarding post-sanctions investment in Iran.
In addition to these activities, Daniel acts as first stop for companies wishing to know more about the startup industries in Iran.
He can be reached at Daniel@bourseandbazaar.com