Azadi Tower in Tehran, Iran
Introduction to Iran Startup Ecosystem
Tehran is the capital of Iran and Tehran Province. With a population of around 9 million in the city and 16 million in the wider metropolitan area, Tehran is the largest city and urban area of Iran, the 2nd-largest city in Western Asia, and the 3rd-largest in the Middle East. It is ranked 29th in the world by the population of its metropolitan area. Moreover, in StartupBlink’s 2019 report, Iran ranks 83rd globally, with Tehran ranking 1st in Iran and 240th globally.
In 2015, Iran’s startup ecosystem was at the peak of its “E-commerce Boom”, and a massive amount of web and mobile startups emerged in this year. It is safe to say that Iran had one of the fastest growing startup ecosystems in the region. In 2016 we will see more action in the brutal e-commerce arena and we anticipate to see more startups in mobile, SAAS and Fintech. The Fintech vibe got really interesting in Q4 2015 and has turned into the emerging trend in Iran’s startup ecosystem.
Successful Startups in Iran
Digikala: @Digikalacom is a leading e-commerce brand, fast growing company and one of the very pioneers of Iranian online retailer which was established in 2006 and now is the most visited online store in the Middle East with a large market share of digital products and consumer electronics in Iran.
Cafe Bazaar: @cafebazaar is a leading consumer internet company in Iran that runs the first and the most popular smartphone application marketplace for Persian speaking countries. They connect millions of smartphone users, advertisers and application developers through our highly scalable and technology-based platforms such as Bazaar app store, Adad mobile advertising network and Divar a platform for classified advertisements.
MamanPaz: @MamanPaz has a network of chefs at home. These housewives cook delicious food and deliver to customers’ door every day.
TaxiModa: @TaxiModa is the first flash sales site of Iran which offers latest collection of local and foreign brands in fashion and apparel with discounts.
Tap30: @TAP30_ir is a private cab e-hailing platform providing standard and premium logistics services to companies and individuals.
ZarinPal: @zarinpal is a pioneer online payment gateway in Iran. They are an innovative and motivated company providing fast and reliable payment gateways for local to large-scale businesses.
Milogy: @milogycom is a scientific approach that includes practical methods, psychological Assessments and applied tools Based On gamification to encourage people to achieve their goals and be satisfied with their life. The revenue stream is simple, we sell assessment and challenges and coaching services.
Shafajoo: @shafajoo is the Iran startup which brings a solution in healthcare.
Esam: @esam_ir is an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services in Iran.
Hesabit: @hesabitcom is a web-based invoicing software that helps you craft beautiful invoices, automatically send payment reminders and get paid faster online.
Strengths of Iran as a Startup Ecosystem
Iran has a large population, one which is substantially educated and has a large entrepreneurship potential. Internet and smartphone penetration is extremely high in Iran, where 70% of the 80m population is under 35. At least half of Iranians have access to a smartphone, according to officials. There are conflicting reports about the number of internet users but according to Internet World Stats, Iran has more than 46 million internet users (57.2% penetration), which is almost half the total number of internet users in the whole of the Middle East, although not all have regular access.
Weaknesses of Iran as a Startup Ecosystem
Every ecosystem has its unique challenges and unique advantages. Iran’s startup ecosystem is no different. It is also impossible to find an entrepreneurial ecosystem that does not have unique challenges.
One of the major challenges is that startups in Iran don’t have ambitions to target the international market. There is no easy way for them to access the world market. There is also a lack of funding for seed-stage startups and there are not many lawyers to guide startups in the right direction. Another problem that startups face is the lack of a proper legal framework for investments and registrations.
Biggest Players in the Iran Startup Ecosystem
1. Venture Capital and Investors in Iran
- In the startup community of Iran when the term “Venture Capital” is mentioned the first name to pop is Sarava Venture (@SaravaVC). Iran’s largest e-commerce Digikala (now valued over $500M), was funded by Sarava. Shenasa, another VC focusing in High Tech, is the VC arm of Pasargad Bank which has been operating for some time. Rahnema is also an investment holding with a minor VC functionality. Rahnema has around 20 startups in its portfolio. In 2015 Sarava invested on a handful of new seed and early-stage startups that are yet to be publicly announced.
- There is also a new guy in town called Iratel Ventures (@iratelventures). Iratel is a well known Iranian company that happens to be one of the first companies in Iran to import cell phones. Iratel was also the official representative of Nokia in Iran. Alongside the names mentioned above, there are also talks of new VCs that we are going to meet in 2016.
- Griffon Capital (@griffoncapital) Iran’s first private equity firm also invests in tech. Griffon Capital invests in early-stage startups. PSIG’s venture capital arm also made some investments other than their successful Buyex investment (Iran’s leading fashion e-commerce). Zarinpal could be a good example of this year’s noticeable investments from PSIG.
2. Accelerators and Coworking spaces in Iran
- Accelerator and Startup camp programs, educational events and tech meetups, co-working space, consultancy services, seed funding and much more – that describes DMOND (@DMONDGROUP), and it is there to help entrepreneurs, developers and designers grow, make a difference, build world-class businesses people love and change the world.
- TAC (@AcceleratorTac) is startup accelerator and seed venture fund with a local focus and global vision, and an emphasis on diversity. Each selected startup receives an investment of up to USD 15k in return for a 15% equity stake.
- Avatech (@avatech_ir) is a startup accelerator that provides entrepreneurs with the necessary ingredients to succeed. We provide aspiring entrepreneurs with mentorship, entrepreneurial training, seed funding, and a creative workspace through Avacamp and Accelerator.
- MAPS (@fkorangy) is the first private support center for technologists and entrepreneurs in MENA Region offering support for the development of an ecosystem that promotes innovation and independence for young professionals in the high tech sector.
- Finnova (@Finnova_ir) is Coworking Space. Finnova is a medium for teams, mentors and investors to become stars; using their abilities and Finnova facilities.
3. Startups and IT Events in IRAN
In 2014 most of the startup community action was centered in Iran’s capital, Tehran. However in recent years, many regular monthly and even weekly events can be found in every corner of Iran. Typically the startup communities started to form in small and large cities through Startup Weekend events. Following with networking events and afterwards, fireside chat came along.
- Iran Web and Mobile Festival: @iranwebfestival is the leading Iranian award honoring excellence on the Internet. One of the main programs of the conference is the panels with CEOs, community leaders, and experts in the web and mobile sector. The aim of these panels is that young entrepreneurs could learn from the experienced ones. The closing ceremony of Iran Web and Mobile Festival would be held along with Iran Web and Mobile Conference. During the festival, the best websites and apps would be announced in their own group.
- Startup Grind Tehran: Startup Grind is the largest independent startup community, actively educating, inspiring, and connecting 215,000 founders in over 185 cities. You can join startup grind in Tehran, Isfahan, Shiraz, Rasht, Zanjan.
- Startup Week Tehran: Startup WeekTM brings entrepreneurs, local leaders, and friends together over five days to build momentum and opportunity around your community’s unique entrepreneurial identity. First startup week held on during of GEW in Zanjan. Watch first Zanjan Startup Week video.
- Startup Weekend Tehran: Startup Weekend is a 54-hour weekend event, during which groups of developers, business managers, startup enthusiasts, marketing gurus, graphic artists and more pitch ideas for new startup companies, form teams around those ideas, and work to develop a working prototype, demo, or presentation by Sunday evening. Startup Weekend has been held in more than 28 cities of Iran.
- Lean Startup Machine: (LSM) is a three-day workshop on building a successful business. Most new ventures fail because they build something no one wants. LSM teaches you a process for discovering which products will succeed in the marketplace and which won’t. LSM has been held in Tehran and Shiraz.
- Finstars attracted hundreds of fintech enthusiast to Tehran’s International Fair Ground and was home to 10 local VCs and 50 fintech startups which showcased their work during the four days of the expo.
- iBRIDGES: At the heart of @iBRIDGES lies the commitment to actively contribute to developing and growing the high-tech entrepreneurial ecosystem in Iran. This objective is based on the notion that the promotion and development of entrepreneurial capacities for members of society is a key lever to elevate their social condition. Entrepreneurship opens minds and enables individuals to unleash their creative capacities. It enables them to shift their perspective from seeing themselves as mere consumers or passive members of society, to being active producers, contributors, and creators of their social reality. In particular, the high-tech entrepreneurial space brings with it game-changing dynamics and new ways of engagement that promote diversity and equal opportunity, celebrates merit-based achievement, advocates participative management, as well as fosters, shared ownership, all elements needed to establish a “Global Innovation Economy”.
- Pirate Summit Tehran: The Pirate Summit Global brings the spirit of the Pirate Summit to 50 cities all across Europe and the Middle East!. This event happened 2 times in Tehran.
4. Startup Media in Iran
- Shanbemag (@shanbemag1) is the first startup magazine in Iran that is published weekly.
- TechRasa (@techrasacom), founded in June 2015, is a media covering the Iranian startup & entrepreneurship ecosystem. In addition to covering Iranian startups, TechRasa is also a bridge to connect the world to Iran’s startup scene.
- Dr.Startup (@AlipourMahdi): My True Journey in Startup World , Dr.Startup is a place which I share my experiences and Tutorials about startup stuff based on Iranian culture.
- Khoshfekri (@khoshfekri): It is an educational website for learning the fundamentals of entrepreneurship and startups.
Iran is quickly becoming one of the fastest growing nations on the startup scene! It only needs to develop a better infrastructure for investment and scaling.
About the Author
Amirreza Mohammadi is a Startup Community Builder. He has organized two Startup Weekend events in Iran as well as a Startup Week in MENA. He currently works at Stage Co as a Country Manager.