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Spring of Startups in Iran Technology startups booming in Iran despite U.S. sanctions

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Global banks and giant multi-national firms shun the Iranian market over fears that they could be fined or sanctioned by the U.S. government. Likewise, big-name Western brands avoid showing up in the Islamic Republic. The hardline administration of U.S. President Donald Trump, dominated by belligerent neoconservatives, is making every possible effort to squeeze Iran economically.

International credit cards don’t work in Iran since Iranian ATM machines are not connected to the global banking system. ATM machines operate within the Iranian borders nation-wide. That means debit cards issued by Iranian banks work online internally. That’s why foreign visitors need to bring foreign currencies in cash to pay their bills since there are no international banks operating in Iran.

And there are of course no McDonald's or KFC (Kentucky Fried Chicken) American fast food restaurant chains in Iran. Instead, there are just local brands such as “Iran Fried Chicken.”

Also, don’t think of ordering from Amazon and eBay while in Iran. And forget about calling an Uber. They are not available in Iran.

In their place, an amazingly active technology startup scene has sprung up in the Persian state. Talented young Iranians have not let U.S. government animosity keep the Islamic Republic away from the global trends in business and technology.

True. Twitter, YouTube and Facebook are among Western-originated sites blocked by authorities in Iran. That prompted young Iranian entrepreneurs to invent their own versions authorized and supported by the government.

While the Trump administration seeks to drive Iran into an isolated outcast, the tech-savvy Iranians are already turning Iran, a country of 80 million people, into a thriving market ripe with great opportunities.

Among the fastest-growing firms in the digital transformation is Snapp, a popular ride-hailing app. It’s an equivalent of Uber. DigiKala is the Iranian version of Amazon. It’s the biggest e-commerce business and a good example of how startup companies are flourishing in the country.

Iran is partly turning to startups out of necessity. Since Iranians do not have access to many of the services available in the West or other parts of the world such as Uber, Paypal and Amazon, startups such as Snapp and Tap30 have been designed to offer Iranians the same service that Uber does in America.

From booming ride-hailing firms to e-commerce retailers similar to their multi-national peers, Iran is now home to many modern businesses that include "Shared Economy” and "Gig Economy."

The administration of moderate President Hassan Rouhani has taken startup companies seriously, believing that knowledge-based firms give the Islamic Republic the option to develop a new business system.

Vice President for Science and Technology Sorena Sattari leads government policy to encourage establishment of private startup firms as part of a strategy to reduce Iran’s reliance on revenues from crude oil exports.

The government set up Pardis Technology Park (PTP), 20 kilometers northeast of capital Tehran, in 2005. Located at the foot of the Alborz range of mountains in an area covering 38 hectares of land, the PTP was created to promote the establishment of knowledge-based businesses. Now, it covers 60 hectares of land and is expandable to 1000 hectares.

At the entrance of the park, visitors are attracted by a big sign that reads: "Iran Silicon Valley."

One of PTP’s responsibilities is to create a viable technology sector by strengthening ties between universities and industry as a smart way to engage the educated elite and pave the way for commercialization of ideas pursued by research units stationed at the PTP.

There are now 258 knowledge-based units in various fields stationed at the PTP, according to PTP chief Mahdi Saffarinia. He has called PTP the biggest startup campus in Western Asia, saying there is no other place in this region where one can find so many startups under the same roof.

Sattari has repeatedly clarified that his priority is to encourage innovation, and one way of achieving that is to link industry and universities, and allocate space for privately-owned startup accelerators.

The PTP has been proclaimed "Iran Silicon Valley" and “the region’s paradise of technology” with the objective to change Iran’s oil-based economy into a knowledge-based system. That’s how the Rouhani administration seeks to reinvent Iran for the 21st century by wooing entrepreneurs to Tehran.

Iran’s technology entrepreneurs are learning to live with revived hostility in the United States.

While partnership with giant foreign startup firms can greatly contribute to the growth of the tech sector, the absence of U.S. giants such as Amazon and Uber have allowed their Iranian equivalents to grow rapidly.

So, the Trump administration’s animosity could paradoxically help further flourish the tech sector.

Sattari said in June 2018 that brain drain has reversed because of the booming startup ecosystem in Iran, insisting that no one can sanction Iranian brain and that knowledge cannot be sanctioned.

The technology leader portrays Tehran as a “living lab” and a place where companies big and small can try out new ideas. The strategy is to turn Iran into the startup heart of Western Asia.

Around half of Iran’s 80-million-population is under 30, many of them with high levels of education. Mobile phone usage is universal in the country and Internet penetration rate is on par with global standards.

According to Iran’s Ministry of Communication and Information Technology, by March 2017 the Internet penetration rate was around 65 percent, one of the strongest in the Middle East and North Africa (MENA) region. There are 80 million mobile phones in use in Iran, about half of them smartphones.

Many young Iranian entrepreneurs have created startups with great success, thanks to a 3G and 4G speed connection that has grown over the past few years. If you walk in the streets of Tehran and other major cities, you will notice that the primary tool of Internet use in Iran is mobile phones.

Iranian entrepreneurs agree that the rollout of 3G and 4G mobile connections as well as high-speed landline Internet service have fueled Iran's technology startup boom. Most, if not all, of them consider high Internet speed as the start of a new era for entrepreneurship in Iran.

Despite American sanctions and restrictions, efforts on the part of the private sector and the government have garnered results. E-commerce is growing at a rapid speed.

That explains why policy-makers came to believe that creation of startup firms is the best solution to fight sanctions and diversify Iran’s economy.

Sattari announced at an event in April that Iranian startups had generated 600 trillion rials ($7.5 billion) in the year ending 20 March 2018.

Iran’s startup ecosystem has flourished since 2012, when Iran was slapped with unprecedented sanctions before it reached a landmark deal with global powers in 2015 that led to the lifting of sanctions.

Industry experts, analysts and government officials all believe that sanctions did help spur entrepreneurship in Iran by protecting them from outside competition.

“Sanctions are cruel, no doubt about it. I believe that American sanctions are primarily aimed at preventing or slowing down the growth of Iran’s scientific advancements. But sanctions have been a blessing in disguise. It was actually under the previous round of sanctions that startups began to flourish in Iran. If there were no sanctions, Iranians would have got accustomed to widespread consumption of foreign goods. There would have been little birth of science and innovation,” said Parviz Karami, a senior official at Iran’s Vice-Presidency for Science and Technology.

He argues that economic restrictions created duress and opportunity.

“The same sanctions that cut or limited Iran’s access to global markets have been a boon for the tech sector by limiting competition. Sanctions led to a new generation of experts who created their own products to replace the ones Iranians had no access,” Karami opined. “It was under sanctions that our startup firms produced laboratory equipment and exported to China and South Korea to everybody’s surprise. Iran has a large educated population with a huge entrepreneurship potential. It’s moving in the right direction towards a knowledge-based economy and distancing itself from an oil-dependent economic system.”

Karami believes that the new round of unilateral sanctions by the Trump administration, after its abrupt exit from the JCPOA in May 2018, is expected to further help, rather than harm, the tech sector.

“There is a huge expanding market for startups. That’s probably why many of the Iranian diaspora have returned and continue to return home to set up their own knowledge-based business,” he said.

 Iranian Expatriates Look Back Home

Traditionally, Iran has had a strong engineering education, enabling the country to develop its own engineering capabilities and workforce. That’s why Iran ranks 4th in terms of educating engineers in the world.

And Iranian expatriates have been among the top employees of successful startup companies in the United States from eBay to Dropbox, from Twitter to YouTube, and from Uber to Plug and Play Tech Center.

Since 2013, the return of Iranian expatriates accelerated as they began to look back home and translate their creative ideas into action. The return of educated young experts to their motherland joining domestic talents changed the tech scene significantly in the Islamic Republic.

Meeting Iranian expatriates has been an integral part of Rouhani’s itinerary in his foreign trips where he has continuously encouraged them to re-engage with their homeland.

The Iranian diaspora is estimated between 5 and 7 million people, mostly living in North America and Europe.

Some of the most successful startup companies in Iran have been set up by Iranian expatriates who studied abroad _ including Iranian entrepreneurs with great achievements in America’s Silicon Valley _ and returned home to translate their ideas into action. The tech sector attracted many young Iranians back from the United States, Canada and Europe and allowed them to marry their experience of the startup scene with locally-educated talent.

That explains why many local versions of international startups are now operating in Iran.

Startups have grown fast in the past couple of years as a new branch of the Iranian economy. Snapp the equivalent of Uber, Bamilo the equivalent of eBay, Aparat the equivalent of YouTube, Digikala the equivalent of Amazon, Cafe Bazaar the equivalent of Google Play, and NetBarg the equivalent of Groupon are just a few examples of such startups.

By establishing PTP and encouraging successful Iranian entrepreneurs to return home or re-engage with their motherland, the Iranian government is trying to revive the golden time of Persian science and achieve the long dream of reducing Iran’s reliance on crude oil exports and diversify its economy.

Sattari has suggested several times that Iran seeks to be the superpower of science and technology in the region and number one in the Islamic world.

Under a national plan, known as the 20-year Perspective Document, Iran aims to turn into a technological and economic powerhouse of Western Asia by 2025. That’s part of Iran’s efforts to produce a “knowledge-based economy” in the face of unilateral U.S. sanctions.

This is exactly the place where professional Iranian expatriates with the right entrepreneurial attitude can make a real impact.

Their startups and e-commerce apps are flourishing, driven by government infrastructure support and efforts by young Iranians determined to bring modern life to their country.

According to Saffarinia, the PTP plan in the longer term is to host 11,000 knowledge-based units and expand the PTP lands to 1,000 hectares.

Karami says Iran’s Vice-Presidency for Science and Technology has succeeded in attracting 1,070 Iranian expatriates who had studied in over 100 universities around the world in the past decade. Many of them, after their return to Iran, either launched their own private startup firms or were engaged in research and began to contribute to scientific institutions in the country.

 Tehran, A Creative City

& Startups Hub in Iran

Tehran is home to a population of around 8.5 million in the city and over 14 million in the larger metropolitan area of Greater Tehran. It is the most populous city in Iran and Western Asia.

As the political, economic and cultural capital of Iran, Tehran enjoys a suitable background for elite attraction. It possesses huge training facilities in science and culture and is considered a great place for gathering creative people. These features have given Tehran an acceptable status to be converted into a creative city.

Iranian state media quoted Sattari as saying on 19 August 2018 that Tehran could turn into a Silicon Valley in Iran with the prestigious Sharif University of Technology being the pilot platform.

“We are currently working on turning the entire Tehran into a big science and technology park. Can anyone find a better place than Tehran? The 16-million-population living in Tehran and Karaj provide a fertile ground to foster startups,” he told state media. “One of the districts that can work as the innovation station is areas around Sharif University of Technology. The district can operate as a pilot plant for promoting innovation.”

Sattari said some 450 knowledge-based companies operate in the vicinity of the university. That can be a productive ground for the emergence of new startup businesses and fostering creativity among the citizens.

“Tehran is the best place to carry out knowledge-based activities. All the necessary infrastructures are available to create a smart and creative city in Tehran. You will not find any city in Iran that has as many highly prestigious universities as Tehran and a great market for technological businesses,” he said.

But Iranian talented professionals are not in Tehran alone. Major provincial capitals such as Isfahan, Mashhad, Shiraz and Tabriz are recording the growth of their startups too.

He boasted that Iran is a progressive nation in terms of new technologies, claiming the Islamic Republic ranks second in Asia in terms of online shopping.

According to Sattari, there are well over 3,600 active startup companies in Iran, playing a key role in reducing the level of unemployment among university graduates and increasing productivity in the country.

Iran is a leader in nanotechnology with more than 100 firms operating in the field of stem cell, of which 70 are knowledge-based companies. He said efforts have already begun to commercialize their products.

Knowledge-based companies, Sattari said, could “flourish more under sanctions.”

In the minds of many people in the West, Tehran is a city associated with stern-faced clerics, women in black chador and demonstrators shouting against “the Great Satan.”

But there is a profoundly different face of Iran and its capital that has not been exposed to the outside world or at least not adequately publicized.

Tehran has seen a burst of entrepreneurship, transforming the city into a hub of technology startups. They are already fostering a different vision of what the Islamic Republic could be.

Time to Focus on Global Markets

Entrepreneurs and business experts argue that Iranian startup companies have focused too much on the domestic market and are suffering from lack of access to global markets.

Entrepreneurship expert Bahram Sattari _ not related to Iran’s Vice President _ believes there is a link between the limited global reach of Iranian startups and their concentration on the domestic market.

"More than 90 percent of Iranian startups are only focusing on local markets while the opposite is true in Southeast Asian countries like Singapore where 70 percent of their target market is outside of their borders," he told Iran Europe Business Digest (IEBD).

Sattari, a frequent speaker in startup events nationwide, urged the Iranian government to adopt policies that lead to the entry of Iranian startups in other countries, especially neighboring and regional states.

"We are seeing the rapid growth of startups in Iran. But players in the startup ecosystem should also step up their game and become determined to venture into global markets," he said.

Iranian startuppers have gone beyond the local market but their overseas business is yet very limited.

Vice President Sattari said on 19 August 2018 that knowledge-based products have largely been exported to China and Southeast Asia, as well as Iraq and Afghanistan, Iran’s western and eastern neighbors.

“We could not believe the day we shipped the first product to China, but now we have two pavilions in China that operate in the field of nanoscience, biotechnology and medicinal plants,” he told state media.

Sattari said Iranian startup firms are now looking at Africa, first focusing on Ethiopia, Uganda and Kenya, to expand their markets.

“That will be our first experience in Africa,” he noted.

Saffarinia told an annual festival of the best PTP units on 28 August 2018 that the companies stationed at PTP exported products worth US$24 million in the last Iranian calendar year of 1396 (21 March 2017 – 20 March 2018), the semi-official ISNA news agency quoted him as saying. He clarified that it included 52 knowledge-based products exported to 12 countries.

Karami says it’s the government policy to help the private startup firms expand their markets. That’s why representatives of startup companies accompany Iranian ministers and government delegations in foreign trips to market their products abroad.

“We have our export pavilions in China, South Korea, Russia, Iraq and Oman and are now in the process of entering the African market,” he said.

 Opportunities for Foreign Investment

Iranian startup firms have been bolstered partly because of sanctions. Although they see the lifting of sanctions as an opportunity rather than a threat, the absence of giant Western startup companies in Iran means they seize the market and find a more powerful place in the startup ecosystem.

It has been due to the absence of Uber that Snapp and Tap30 have flourished. And the absence of Amazon in Iran has allowed its Iranian equivalents to grow rapidly.

Now that some of them have turned into big names in Iran, even foreign startup firms will find it difficult to compete with them if they decide to set up a business in Iran.

But many startup companies are convinced that they can gain more by entering into partnership with giant foreign startuppers.

Bahram Sattari, the entrepreneurship expert, believes that there are great opportunities for European and other foreign Small and Medium-sized Enterprises (SMEs) in Iran’s emerging market through partnership or joint ventures.

He said foreign professional entrepreneurs can link with their Iranian peers without the fear of being exposed to unilateral U.S. sanctions. And foreign startup firms with no stake in the American market will find Iran a golden opportunity that should not be missed.

“Competing with local entrepreneurs isn’t easy. Entering the Iranian market has its own challenges. It’s wise to say that local entrepreneurs understand those challenges better than foreign entrepreneurs and handle them more efficiently,” he said.

Based on rankings from Global Entrepreneurship Monitor and the Global Entrepreneurship and Development Institute, Iran is ranked 23 in terms of startups, which is almost on par with Australia and China.

“For instance, should global top e-commerce firms want to operate in Iran, they will have to compete with big-name local startups like Digikala because the Iranian e-commerce business has already been able to dominate the market and built trust with its customers. So, the best option for global brands is to enter a joint venture with successful local startup firms,” Sattari said.

Karami says developing a knowledge-based economy and boosting the country’s scientific abilities is Iran’s priority. Thus, startup firms have a bright future in Iran.

“When investors, foreign or Iranian, ask me what is the best performing sector in Iran for the next decade, I name e-commerce and the tech sector without any hesitation. Knowledge is not just an asset but a new type of economy,” he said.

 Here are 20 Iranian startup companies, out of many:


Iran’s Biggest E-Commerce Startup

Iran is an emerging e-commerce market. One of the startup companies that stand out in the local market is Digikala.com, the Iranian equivalent of Amazon. Established in July 2006, Digikala.com was originally an online retail website for digital goods. It quickly rose to prominence in less than a decade. Currently, it ranks as the third most visited website in Iran and the most popular startup firm in the country.

After its launch, Digikala expanded the categories of goods available for purchase and now sells everything from smartphones to books, sports and leisure, healthcare and beauty, household items and artistic products, and even cosmetics. As of 27 August 2018, Digikala's global ranking was 261 based on data published by Alexa.com.

Digikala was founded by twin brothers Hamid and Saeed Mohammadi in 2007 with just $20,000. It raised additional funds via Sarava, the country's top venture capital fund and Digikala’s main shareholder. Sarava is 45 percent owned by foreign investors.

Digikala now accounts for more than 85 percent of Iran's online retail market.

With a staff of over 900 and about 850,000 visitors every day, Digikala was estimated to be valued at $150 million in 2014, $500 million in late 2015 and over $1 billion in 2018.

The company offers same day delivery in Tehran and the nearby city of Karaj, and offers next day delivery in 20 other cities.

Mohammadi brothers, both of them engineers, were motivated to set up Digikala after they could not find online information about a new camera they were searching to buy.

So, they made a decision to set up a homegrown version of Amazon. They quit their jobs, sold a car and put their entire $20,000 savings to establish their company. With their experience in web programming and graphic design, the two established Digikala.

Soon, they began selling digital cameras and mobile phones online in their small rented office in Tehran with a group of just seven people. After a decade, they now offer thousands of products with a daily average income of $400,000 and shipping more than 4,000 orders each day. It has over two million visitors per day and more than 2 million subscribers.

Saeed told the IEBD that their Internet behemoth includes companies that provide services in different sectors of information technology and communications. Among its main subsidiaries are the online store Digikala, e-book and audio book store Fidibo, Digikala Fresh and the payment service DigiPay as well as content-producing and logistic services.

He said following the launch of Danesh Fulfillment Center by their group, Digikala was turned into the biggest fulfillment house in the Middle East. The center has the capacity to hold four million goods and provide services on 300,000 goods on a daily basis. With 23 distribution centers across 23 provinces, Digikala has made it possible to deliver goods the same day in Tehran and the next day in other cities.

"Companies of the [Digikala] group have experienced an average annual growth of 100 percent. Should we keep this trend, a brilliant future will be awaiting Digikala in Iran and the region," Saeed said.

He noted that the primary goal of Digikala group is to provide a variety of online services with high technology and world-class standards. This vision also seeks to make Digikla's subsidiary companies the top choice of customers in the MENA region.

"In Digikala, the focus is on building the future and developing markets that we have already tapped," he said.

Now, Mohammadi brothers are thinking beyond Iran’s domestic market.

"Digikala plans to expand its operations to a number of Middle Eastern countries in order to expand its operations beyond Iranian borders and brace itself to face powerful international competitors," Saeed said. "Even today, we are facing foreign competition, including from the [German-based] giant Rocket Internet, which has invested in different countries including Iran."


A Video-Sharing Web

The Iranian equivalent of YouTube, the video-sharing website Aparat.com has come a long way since it was first created in 2010.

Aparat.com allows Iranians to upload video similar to Google’s YouTube, which is blocked in Iran.

Aparat.com is said to be the sixth most popular website in Iran. It has over one million visitors a day.

According to Mohammad Javad Shakouri Moghaddam, the company's CEO and co-founder, he and his two partners made their foray into online business some 15 years ago. As he put it, "at the time not much was going on in the Dot com world, but the global atmosphere showed that certain things were happening and it would spill over to Iran. Therefore, we took on this work."

"First we launched an online survey which failed, and then we started cloob.com, a social network, at a time when Myspace was the dominant social network and it was well-received," Moghaddam told IEBD.

Three years later, they purchased Mihanblog, a blogging site and turned it into a popular platform.

For years, according to Moghaddam, Mihanblog and Cloob.com were among the three most-visited websites in the country.

Then, they decided to test the waters in video sharing. That was Aparat. With YouTube blocked in Iran, they saw an opportunity but Moghaddam never imagined that the website would become as popular as it is today.

“We never thought that it would become this successful, given government controls and the network situation in the country at the time,” he said. “But after a while, we noticed an exponential growth.”

Moghaddam claims that Aparat is now the most visited Website in Iran (after Google) with 33-36 million unique monthly visitors from Iran and other Persian- speaking countries like Afghanistan and Tajikistan.

“15 percent of our traffic comes from overseas,” he said. “Every month, 450 million videos are streamed by Aparat.com.”

In 2015, Moghaddam and his team launched filimo, a Video on Demand (VOD) service like Netflix which now accounts for more than 65 percent of the country's video streaming market.

The company is now venturing into content production with one series coming out in December and three others for the next Iranian calendar year that begins on 21 March 2019.

They also own a digital advertising subsidiary called Saba Vision, which Moghaddam says is almost “the biggest digital advertising agency in the country” because it has the largest media source at its disposal. The entity is run by Moghaddam's brother.

Flilimo has 450,000 paid subscribers which Moghaddam hopes to increase to 800,000 by the end of the year.

There are 12 other players in the area of VOD but he claims that Aprat is by far leading the field.

Moghaddam, a graduate of the prestigious Amir Kabir University of Technology in Tehran, acknowledges that had YouTube not been blocked in Iran, they would not have started Aparat in the first place "because at the beginning, it is not possible to fight successful American firms, not even Europeans.”

But he considers iflix, a Malaysian-based subscription VOD, and icflix, a MENA VOD platform, as Aparat’s rivals in Asia.

"What we are doing is to shape the behavior of the people to demonstrate that it is possible to watch films for four hours non-stop without buffering," he said.

Moghaddam explained that he and his co-founders put their own money to launch Aparat.com, saying "We started out by one of us selling one of his cars.” But he added that “Fimilo is the platform that needs more cash to be invested and this is the area we might choose to attract investment."

As part of its expansion scheme, filimo is planning to enter the Arab market by producing content suitable for the local culture and fill the gap that exits both in content and services there. A sharp fall in the value of rial, Iran’s national currency, in recent months has provided even more incentives to Aparat.com and filimo to look overseas for currency income.

Moghaddam and his team started their work at a time when online cultural businesses were perceived with great suspicion by the country’s Islamic authorities who were concerned about a Western “cultural onslaught.” They were afraid that Western presence might erode revolutionary values.

In the words of Moghaddam, online film business was looked at "even worse that narcotics trade." But things changed soon with senior government officials encouraging domestic Internet startups to thrive and challenge their foreign rivals.

"Our biggest success has been in the last couple of years" when the attitude toward online businesses changed.

The veteran believes that the entrepreneurship landscape in Iran has greatly improved.

"The difficult current economic circumstances, whether it's due to sanctions or mismanagement, is somehow prodding people to leave the country in search of a better life elsewhere. It’s the opposite of what happened in the last couple of years when Iranian expatriate entrepreneurs started to pour in from abroad," he said. "But I see things differently. To me, the overall situation is in favor of entrepreneurship and officials have become friendlier toward the virtual space and startups have kept burgeoning day by day." 

Moghaddam said he is planning to expand into the Middle East market and beyond, using a network of producers creating original content. But he credited part of Aparat’s success to sanctions.

“We would have never launched Aparat.com if YouTube had been allowed to operate in Iran. The absence of YouTube has helped us to grow,” he said.

3. Tap30.ir

A Ride-Hailing Startup App

Tap30 is among several startups that have scrambled in recent years to tap the burgeoning ride-sharing business. Its founders, Milad Monshipour and Hooman Damirchi, were living and studying abroad when they decided to return to Iran, a vast country they saw as a fallow ground ready to be cultivated. Monishpour was living in Canada and Damirchi in the UAE.

However, while ideas percolated in their mind, it took 4 to 5 years before packing up to return home.

After toying with the idea of establishing a luxury fashion brand, they abandoned that in favor of an initiative that would truly "impact" the society.

With the ride-hailing startup Snapp having acted as trailblazer, the two friends decided to establish their own ride-hailing firm.

With assistance from Rocket Internet, a German-based Internet company, Tap30's first trip was launched in 2016, turning the newcomer company into a serious rival for the bigger and older ride-hailing app Snapp.

Known as one of the fastest-growing companies in the digital transformation field in the Middle East, Snapp was launched in February 2014 in Tehran. It very quickly expanded its market size from just 100,000 runs per day in Tehran in January 2016 to near 1 million runs now.

According to Shahram Shahkar, the CEO of the company who was educated in Canada, Snapp employs more than 600,000 active drivers and more than 1,000 personnel. It reportedly carries over 1 million passengers per day. The company has been valued at over US$1 billion. It operates in Tehran and 24 other provinces, out of Iran’s 31 provinces.

Let’s return to Tap30.

Tap30 is the second major ride-hailing app in Iran that connects you to drivers through the mobile app and the corporate panel. The price of the trip is set beforehand, to eliminate haggling.

Monshipour and Damirchi had initially set the goal of reaching 10,000 rides per day within the first year of their work but they hit that landmark just within a few months. That, according to Monshipour, is evidence of "public acceptance" of the program.

At that point, Careem, a Dubai-based transportation network company, offered to purchase Tap30 but was rebuffed.

As a second major player that challenged the traditional taxi companies in Iran, Tap30 faced strong opposition from Taxi Drivers Association.

“This view still exists but is now in new disguise,” Tap30 co-founder Damirchi told the IEBD. “Two or three years ago, when we were a small company, we had small opponents like the association of traditional cab drivers but now we face resistance on a higher level from the Interior Ministry and Municipalities, which continue to look at new entities with traditional mindsets.”

During those difficult times, Monshipour says, his company was encouraged by tech-friendly government officials including Vice President Sattari and Minister of Information and Communications Technology Mohammad Javad Azari Jahromi.

As a bigger, stronger entity, Tap30 now finds itself more open to foreign investment and possible tie-ups.

“This is a business of scale. The bigger it is, the better the economy of scale," Damirchi says, citing as an example the merger between Uber and China's Didi Chuxing and Russia's Yandex. "Therefore, Iran is no exception and the short answer to whether that could be thought of (foreign partnership) is yes. But when and how or with whom, that is not known as of yet.”

Presently, Tap30 is active in 15 major cities and 24 towns. Over 450,000 drivers have been recruited and 1,000 people are directly employed by the startup.

"Currently, taxi-hailing firms only account for 30 percent of the market. Therefore, there is a huge potential for Tap30 to grow," he adds.

This is how Damirchi envisages his company’s plans: "Our vision is to turn Tap30 into a transportation hub in line with our motto 'freedom of movement' at low cost and for people to meet all their transport needs is a one stop shop. This vision is aimed at making trips so convenient and affordable that people will no longer have incentive to possess a personal car.”

Just two years after creating Tap30, its founders feel satisfied with what they have accomplished and believe that they have, to a large extent, realized their goal of "impacting the society" but for them dreaming never stops.


Iran’s Leading Startup Accelerator

Avatech is often described as Iran’s leading startup accelerator, providing entrepreneurs with the necessary elements to flourish. It offers support and advice to fledging companies with a new business idea or newly emerged business ventures that seek to meet market needs, especially in the tech sector.

“We provide aspiring entrepreneurs with mentorship, entrepreneurial training, seed funding and a creative workspace,” the company proclaims.

5. Felexa.com,

A Tourism Social Media Platform

Felexa.com is a social media platform in the field of tourism. It provides useful information to tourists visiting Iran, specifically information on the country’s tourist attractions all around the country.

The website calls itself “a comprehensive information bank of Iran’s tourism attractions.” Since the information is updated by locals and tourists, felexa believes the information is always up-to-date.

Tourists can share their experiences, photos and videos of their travel.

“We are reaching out to residents across towns and villages to provide local services to tourists. That helps reduce the costs. At the same time, it helps development of local communities by generating income through the tourism industry,” Felexa founder Mohammad Abumaash told the IEBD.

He says tourists can benefit from such services through felexa and receive all the information they need for free, including information on each and every tourist attraction across cities and towns.

"Our website also provides information on the local culture, traditional games, music and architecture," he says.

Tourists can select their tour guides (which include both men and women) from the website. They have included exclusive tours in their website like cave expeditions and desert expeditions.

“Expanding tourism and travelling stand tall at the heart of felexa’s vision,” Abumaash insists. “It provides opportunity for inbound tourists to obtain their required information about touristic activities and attractions in Iran. It also helps entrepreneurs and business people to present their services in a better, more creative way. Felexa seeks to introduce Iran’s unknowns to the world by connecting tourists with locals.”


A Hospitality Service Web

It operates as an online hospitality service accessible through its website and mobile apps. It's the Iranian equivalent of Airbnb which leases private homes or places to stay inside Iran, even homes or villas in rural areas and forests, for both Iranians and foreigners.

Members can be both guests and hosts. They have the option to arrange or offer lodging, primarily homestays, or tourism experiences.

Founders of the startup have listed 2,500 homes in 28 provinces (out of 31 provinces) in Iran. Their website has been growing at a monthly rate of 30-35 percent.

"Our focus is on the quality of homes because this market existed before in Iran but was not in its best shape in terms of prices and quality," says Taha Razavi, the 28-year old founder of shab.ir.

Through their android and iOs apps, shab.ir team plans to expand into other markets by both bringing in foreign visitors and sending Iranians abroad.

Guests can search for lodging. Users must provide personal and payment information while booking a place to stay. The company also provides travel guides or information about the chosen neighborhood.

Hosts provide prices and details _ and photos _ for their rental properties or event listings. Pricing is set by the host, with recommendations from shab.ir.

Couple guests must provide identification documents to comply with Iranian laws.

7. Tripsaz.ir,

A Traveler & Tour Guide Site

In Tripsaz, one person can be both a traveler and a tour guide through one single account and make money.

Imagine that a family wants to travel to a particular place. They choose the purpose of their trip as either "nature exploration," “gastronomical exploration" or "city exploration." They ask for a guide who is fluent in English and has a car as well as a tourism card.

Tripsaz sends the requests to all the guides in its list and they offer their rates, giving the travelers a variety of choices _ unlike hailing apps where you have no say is choosing your driver.

The startup was co-founded by two young engineers Mehrdad Nateghi and Maryam Saberi. They say their startup gives applicants a custom-made trip, free of trials and errors.

Four days into launching their application, they got 120 registered users.

For now, they have focused on the local market. They are planning to attract foreign tourists next, and finally take Iranians abroad through their app.


A Music Streaming App

The music streaming app and website was launched in 2014. They have recently launched android TV. So far, they have had 800,000 installations and now boast 150,000 active users.

Navaak is the local version of Spotify. It provides content from record labels and media companies.

"Because copyright is not practiced in Iran, we are trying to promote that culture through our work," says Ruhollah Khoshnejad, manager of Navaak’s customer affairs.

"The physical market for selling music is shrinking and we intend to be a social network where users are not just listening to music but are also sharing their views," he said.

Their content includes music licensed by the Ministry of Culture and Islamic Guidance and Western Classical music.


An Online Communications Platform

Skyroom is an online communications platform. It’s web-based and needs neither a particular application nor a flash player.

According to Mohsen Dehnavi, the company's sales manager, the platform has a very simple language, has many features like sharing your desktop with others, allows you to watch your users chatting online and save the chats in the end.

Skyroom can also be used as a tool for organizing educational programs or conferences and webinars.

“What distinguishes Skyroom from its rivals is the good online support from 8:00 am to 10:00 pm. And the website's language is in Farsi which makes it all the more convenient for less tech-savvy users in Iran,” he said.

The platform is being utilized by overseas users including two professors based in Argentina and Canada, who employ the platform to teach online course at Isfahan University of Technology.

10. Zemestan Rasaneh Paya Arts and Culture Institute, Producer of Computer Games

The main goal of the institute is to produce computer games. Since last year, they have become active in the area of mobile games.

Their first serious mobile game was “Sniper: Revenge Operation.” It was released last year in Café Bazaar (the Iranian equivalent of Apple Store) and was well-received by game enthusiasts.

"The game has had 100,000 active installations and more than 500,000 downloads. It’s about the Islamic State of Iraq and Syria (ISIS), a Salafist militant group following an extremist doctrine of Sunni Islam originating in Saudi Arabia. The game was a hot subject when it was released because it coincided with supporters of the terrorist ISIS group attacking the Iranian Parliament building in central Tehran," says Abolfazl Sajjadi, manager of the institute.

Operations in the game take place in Iraq, Yemen and the littoral Persian Gulf Arab states. Creators of the game are planning a second version to release.


An online shopping site

Bamilo is an e-commerce marketplace startup in Iran. It’s another local version of Amazon. Bamilo is the first and largest venture of the Iran Internet Group (ING), backed by MTN Group.

The startup site competes against Digikala. The site sells everything from scissors to laptops, from cosmetics to clothes, from bags to detergents, from shoes to shampoos, from sunglasses to fire extinguishers, and from kitchen supplies to cellphones.

Afshan Samani, Bamilo’s chief product officer, studied at Shiraz University in Iran before heading to Sweden for her master’s degree. Later, she got her doctorate in Canada and worked there for four years but returned home after hearing that startups have begun to mushroom in Iran.

“I’ve been in Iran for two years now. Many people ask me: Why did I return to Iran? I came back because there are a lot of opportunities here. I don’t regret my decision to return home,” she told Sharif University of Technology students at a gathering on 5 July 2018.

Samani said she smelled opportunity in Iran and she loved challenge.

Bamilo has described its mission as: “creating a better future for Iranians; learn from our mistakes; there is nothing we can’t achieve as a team.”

The online shopping site’s vision is: “It doesn’t matter you are the buyer or the seller. We diligently hope that electronic trade becomes part of your daily life.”


A Group Buying Portal

Netbarg is the Iranian equivalent of Groupon. It’s a group buying portal. The discount site offers a wide variety of deals from restaurants and hotels to health centers and photo shoot studios, from coffee shops to hairdresser clubs and from theater houses to sports clubs.

Netbarg is considered as one of the fastest growing and profitable startups in Iran. The company was launched in early 2011 by cousins Ali Reza Sadeghian and Saman Sadeghian. The discount site has grown enough that the two cousins are now leading teams behind a couple of new online ventures in Iran’s emerging startup market.

Netbarg is considered to be one of the startups that shaped Iran’s startup ecosystem. Since its birth, it has driven Iran’s group buying industry forward, connecting hundreds of merchants and service providers with thousands of users in Iran.

People can buy online coupons on Netbarg to receive discounts from a selection of merchants. The group buying portal also offers “last minute” coupons with more discounts. In addition to Tehran, Netbarg operates in several other provincial capitals.

While discount sites in the United States and other parts of the world have faced problems, Netbarg seems to be doing fine despite competition from other Iranian group buying portals such as Takhfifan.


An Online Saffron Marketplace

Keshmoon is an online marketplace for purchasing saffron, the world’s most expensive spice. It connects saffron customers with farmers, getting rid of the middlemen.

The online e-commerce site was established in June 2017 by Qaempanah brothers, Mohammad and Hamzeh, and their close friend, Siamak Khorrami, all residents of Qaen, a small town in South Khorasan Province in eastern Iran, near the border with Afghanistan. But they practically began business in March 2018.

Iran is the world’s biggest saffron producer and Qaen is a bub for production of saffron, also known as “red gold.”

Mohammad Qaempanah told the IEBD that his 15-member team seeks to provide buyers with the chance to purchase good quality saffron directly from farmers at lower prices by removing dealers.

The environment-friendly Keshmoon promotes organic farming, encourages farmers to avoid using chemical fertilizers and pursue water-saving practices.

The entrepreneur warns that the water sources Iranian farmers rely on have gradually been drying up including water wells and qanats due to excessive consumption of water, endangering the life of the future generation.

Qanat is a gently sloping underground channel to transport water from a water well to surface for irrigation and drinking. That has been an important source of water for Iranian farmers in regions with hot and arid climates for centuries.

Given the worsening water crisis and continuous drought in Iran, Keshmoon encourages farmers to replace cultivation of big water-consuming crops like watermelon with saffron, which consumes little water. That’s part of Keshmoon’s water conservation initiatives. By doing so, farmers can earn more from selling saffron than selling watermelon or other water-intensive crops. That obviously leads to decrease in water consumption while a profitable crop has been produced at the same time.

“Watermelon consumes a lot of water but saffron needs little water. At the end, farmers can earn more by reducing water consumption and cultivating saffron instead of watermelon. That leads to a new crop pattern. It’s a step towards protecting nature and the environment. It’s also important because a healthy and dynamic agricultural sector is an instrumental basis for rural development,” he said.

Qaempanah said his business is growing at a rapid speed.

“We had a growth of 1,000 percent in the past 8 months. Our sales have increased 1,000 percent, meaning that our sales rose 10-fold in the past 8 months. We have set far reaching goals to pursue,” he added. “Our website has around 5,000 visitors per day.”

Keshmoon is now looking at markets in Europe and elsewhere.

“Soon, we will launch our European branch to help connect saffron consumers in Europe directly to saffron growers in Iran. We are in the process of opening our store in Berlin, Germany to respond to the needs of the European market. That will be a beginning to launch our legal and financial infrastructure in Europe,” Qaempanah said.

The entrepreneur is also open to partnership with foreign, specifically European, investors.

“We are open to partnership with European and other foreign investors,” he declared.

Keshmoon aims to take 1 percent of Iran’s saffron market on its first anniversary in March 2019. Iranians consume 50 tons of saffron a year.

According to official reports, Iran exported over 222 tons of saffron worth more than $309 million during the last Iranian calendar year 1396 (21 March 2018 _ 20 March 2018). Iran is the world’s biggest producer of saffron. More than 90 percent of the world saffron is produced in Iran.


An Online Social Media Platform

Cloob.com is a Farsi-language social media and social networking service platform. It’s another local version of Facebook. It boasts to have 2.5 million users.

The platform was launched in 2004 to “meet the modern needs of Internet users in Iran” and connect Persian-speaking people from all over the world. Applicants have to be over 18 years of age to become a registered user of Cloob.com.

The online site can be accessed from a wide range of devices with Internet connectivity, such as laptops, desktop computers and smartphones.


An Advertisement Site

Sheypoor.com is a leading Iranian online classifieds marketplace where anyone can buy, sell and search goods and services free of charge. It’s the Iranian version of Craigslist, a U.S. classified advertisements website.

One will find everything on Sheypoor.com from laptops to property, vehicle, cellphone, furniture, antique, rug, clothing and much more.


A Homemade Food Delivery Network

Mamanpaz is a Tehran-based online delivery service for home cooking.

It connects hungry workers with housewives selling home-cooked meals. It actually delivers Iranian meal home-cooked by real mamas. Customers can order food with a click of a mouse over the Internet or cell phone.

Young female entrepreneur Tabassom Latifi founded her company in 2014, and now she has more than 50 women cooking for Mamanpaz.ir in Tehran. It gets over 1,000 orders per day. Each cook earns the equivalent of up to 1000 euros a month - a good income in Iran.

Latifi says her love for authentic Persian food such as saffron-infused rice served with marinated lamb or chicken kebabs or the herbal stew Qormeh Sabzi _ not fast-food _ was the key driver encouraging her to develop the business.

The entrepreneur migrated from Khorramabad in Lorestan Province, western Iran, to Tehran to study electrical engineering at Sharif University of Technology away from the family but she missed the taste and flavor of the delicious food her mother had cooked for years. And she had no love for fast food. She wanted to get the same food mothers cook at home.

“My mother is a great cook, but we live in two different cities. After I moved from Khorramabad to Tehran in 2004, there was no more homemade food for me. That was when I thought there might be many other people who, like myself, might love homemade food but just can’t have it,” she had earlier told the Financial Tribune, an Iranian English-language daily.

That’s how Latifi began to seriously think of launching Mamanpaz.ir in 2013 and translated her dream into action in 2014.

The popularity of Mamanpaz.ir has spread only by word of mouth and it now has over 15,000 customers.

Customers need to register their request at least a day earlier. They can select the appetizer, the main dish or dessert of their choice. The name of the housewife cooking the food is mentioned in the list. But Mamanpaz.ir does not offer fast-food such as pizzas and burgers.

The food is priced by the cooks themselves but must fall in a range set by the Mamanpaz.ir team in advance. For every order, Mamanpaz.ir gets about 30 percent of the bill.

The moms “are classified according to the ratings they receive from customers,” Financial Tribune quoted her as saying. “I’m happy our project is helping women.”

Mamanpaz.ir independently tests the quality of the mothers’ cooking in various ways such as snap inspection of their kitchens. At the same time, it seeks customer’s feedback via text message, email or phone call.

The business network currently only operates in Tehran, but plans to expand to other cities soon.


A Digital Distribution Service

Cafe Bazaar is the Iranian equivalent of Google Play. Cafebazaar.ir is a leading Android marketplace in Iran, allowing users to browse and download applications.

The digital distribution service is owned by Hezardastan Information Technology Development Group. But Cafe Bazaar was originally launched in early 2011 by a group of talented Sharif University of Technology graduates and students. Among them were Reza Mohammadi and Hesam Armandehi. It has now a pool of enthusiastic IT experts and developers providing digital distribution services mainly to Persian-speaking Android users.

Cafe Bazaar offers more 25,000 downloadable Iranian and international apps for gamingsocial media, messaging and other uses. Roughly, it gets around 20 million visits a week.

Cafe Bazaar has grown in the absence of competitors such as Google Play. Additionally, the dramatic expansion of mobile app and the game industry as well as enthusiasm show by Internet-savvy young Iranians have paved the way for its growth.

Café Bazaar boasts of its services such as “locally developed apps and games which support Persian”, “easy-to-use, local payment methods” and “hand-picked contents by Cafe Bazaar’s editorial team.”


A Discount Site

Takhfifan.com is another Groupon-type discount site.

It’s famed as the deal-of-the-day website, offering discounts in various categories from restaurants and coffee shops to theatre and concert tickets, from sports clubs to beauty salons, and from entertainment centers and medical clinics to air and train tickets.

Takhfifan.com was launched in 2011 by Nazanin Daneshvar, a young female entrepreneur dedicated to promoting tech startups in Iran, and her sister. It has more than a million email subscribers.

The goal of Takhfifan.com is to “turn into the biggest business and publicity platform in Iran” and connect businesses with customers through digital commerce.

Daneshvar is one of many young Iranians who left Germany to return home and become an entrepreneur in her homeland.

 19. Talenteem.com,

A Human Resources Service

Talenteem.com is a human resources services platform.

It was established by Reyhaneh Khalilpour in 2016 to offer skills and expertise in human resources to companies, specifically startups and growing businesses.

Khalilpour argues that she founded Talenteem.com after working at local and multi-national companies inside and outside Iran as a talent management leader and human resources chief because she found out that many businesses and organizations don’t have access to the necessary HR leadership to make them competitive from a recruiting, retention, and motivation standpoint, resulting in wasted time and money, disengagement, and ultimately the loss of valuable employees.

Talenteem.com has been created to provide innovative, scalable solutions to companies and insights on people practices that have the greatest impact on organizational performance. It’s a platform using innovative technologies to enhance business performance.

Khalilpour moved to Canada in her childhood but returned home to set up her startup business.

“Our mission is to become a pioneer and trusted managed HR Services partner for startups and small growing businesses in Iran,” Talenteem.com declares in its website.


An Online Home Services Platform

Pelak.com is an online home services platform, providing a wide range of services such as cleaning service, laundry, water-less carwash, etc.

Babak Moghaddam founded Pelak.com in March 2017. He was the marketing manager of Digikala before launching his independent platform.

Over 1,400 people, most of them women, work as Pelak.com agents while the startup company has a 25-member team in its office. The platform’s goal is to take one percent share of Iran’s US$20 billion home services sector. Moghaddam says he wants to turn Pelak.com into a new Digikala.com.

Moghaddam was the regional manager of Renault, the French automobile manufacturer, at Jebel Ali commercial port in the UAE before returning home in 2015. Upon his return, he joined Digikala as the company’s marketing promotion manager.

For every order, Pelak.com gets 12 percent of the bill.

In addition to Tehran, Pelak.com offers home services in Shiraz, Isfahan and Karaj.


Iran-Europe Business Digest (IEBD) magazine has been launched to facilitate and promote business between Iran and Europe.