Iran: The Startup Promise But Not As Simple

The facts about Iran are well known. The second largest market in the Middle East and North Africa (MENA) region; a diversified economy; the fast paced growth; home to a highly educated workforce, and above all Vision 2025 that articulates Iran’s steps to become the largest economy in Central Asia and the Middle East region.

Mohsen Malayeri, Avatech
Mohsen Malayeri, Avatech

Much like every sector, the startup ecosystem in Iran is also poised to witness hyperactivity as the economy opens up to do business globally. Mohsen Malayeri, Startup Community Builder, Avatech Accelerator advises that while it is best to engage Iran early to tap on its growth, it is a good idea to begin with the technology sector.

Tech Talk
“The technology scene in Iran is extremely savvy. At present, there are 47 million internet users in Iran. Mobile penetration is at 120 percent, and there are 35 million smartphone users. This has led to significant growth in local solutions towards ecommerce. Iran perhaps is bucking market trends in ecommerce with COD (cash on delivery) comprising only 20 percent of payments,” says Mr Malayeri. The key point that he makes here is not just the growth that technology-led businesses are witnessing but also the fact that the local players in Iran are as competitive as it gets.

Parham Gohari, Frontier Partners
Parham Gohari, Frontier Partners

The rise of local entrepreneurs, who are aware of worldwide changes but disconnected with international ways of working, has its own challenges. Parham Gohari, Co-Founder and Partner of Frontier Partners points out some of these, stating, “The founders in Iran are young. Most of them feel that ideas are 90 percent of the game, and everything else is 10 percent. In reality, it should be the opposite. Most of them are amazing tech people but not so much in areas like management, finance, strategy or business planning. The startup culture is not there completely. Some of the founders are expecting big salaries and quick exits. Most ideas are business to consumer and ecommerce led. Original ideas are lacking.”

Clone Much
Clones, however, is essentially the way China’s startup business was built. “China had amazing execution with global knowhow. They built on the talent they had and then created success stories feeding back into the ecosystem. This can be frustrating for investors but we have to support clones because the offer must be localized,” remarks Sorusch Amiri, Associate, BECO Capital, adding, “And you can make scalable close by invite international global parties to the conversation.

Sara Mohammadi, Eventbox
Sara Mohammadi, Eventbox

A point that Sara Mohammadi, Founder of Eventbox agrees with. She says, “Some of the weaknesses are opportunities for international players because they can transfer their knowledge. Investors in Iran are fairly new to the game. Iranian startups will benefit from a partner who can bring global benchmarks, point out the dos and don’ts that have worked in the past and bring strategic partnerships.”

The startup ecosystem in Iran is dynamic and growing with many grassroot enablers. However, the time has come for it to log into the world and spread its wings. The only problem is that despite the promise, the process is painstakingly slow.

Add Comment