Total Investments in Iranian Startups Is Estimated to Be Less Than $700M
1397/05/07
Investment panel at INNOTEX 2018
The 7th International Innovation and Technology Exhibition, INOTEX, was held from 5 to 7 July 2018 at Tehran Municipality Exhibition Centre, with the theme of “Smart City” and the motto of “Smart City, Intelligent Life”. During a panel with investment advisors in Iran’s startup scene at INOTEX 2018, it was announced that the total investments in startups in Iran is estimated to be less than $700 million.
One of the programs that were planned and held for the first time during the 7th INOTEX exhibition was “Stage”. In this program, we saw lectures, panels and various interviews on issues such as management, technical, investment, and legal challenges of startups.
This year, INOTEX hosted the presence of Iranian startups for the second consecutive year. There were more than 200 startups and more than 50 accelerators and investment companies in this exhibition.
There were two lectures and a panel in this year’s exhibition with the presence of the co-founders of TechRasa, Mohammad Reza Azali and Hamed Jafari during a session called “Rasa Insight”. The first speech, conducted by Hamed Jafari, was related to digital advertising and Internet and mobile infrastructure with the main topic called “Iran AdTech Overview 2018″. In this presentation, the statistics related to the digital advertising space in Iran and the study of the potential of the market were discussed with this subject. The talk was based on a report conducted by TechRasa which will be published in the upcoming days.
The second lecture was related to the evolution of messengers in Iran, which was performed by Mohammad Reza Azali. In this lecture, a brief history of the presence of messengers in Iran was mentioned, and then the special reasons for the growth of these applications in Iran were discussed.
The last part of “Rasa Insight” was a panel about the investments status in Iran, hosted by Mohammad Reza Azali and with the presence of Mr. Ali Reza Ashtiani (Vice-President of Payaman), Mr. Farshid Hendi (Rahnama Investment Director), Dr. Peyman Molavi (Investment Advisor) and Mr. Jhubin Alaghband (Vice chairman of the board of directors of Snapp), which was one of the popular panels during the 3-day exhibition.
Mr. Hendi pointed out that the estimation of investments in Iranian startups is about 5 to 7 billion IRR, which 50% of them are by foreign investors. Hendi added: We need the knowledge and the money from abroad. Startups should write their business models based on profitability, even if it slows down their growth because they should keep their startup alive.
He also suggested to startups to use stock options for employees instead of entering the stock market directly, since under the present circumstances, the stock market does not accept the startup ecosystem.
Dr. Molavi also pointed out that in the next 6-7 months, we shouldn’t think about big investments in Iran, but the only thing that would make European companies accept the risk of investing in Iranian startups is the potential of 80 Million consumers in Iran.
“Iran’s economic rank is “-B” which means if you invest your money in Iran you’ll face a lot of problems for its return,” said Dr. Molavi
He added: “There are 80 trillion dollars in the world ready for investment, of which 49% is the US share, 8% of it is for Germany and 7% for Japan. A large fraction of the remaining 20% is from China.”
Mr. Alaghband pointed out that there is no possibility of foreign investment and we shouldn’t be optimistic about it. “We have had a fundamental shift in Snapp, and we’re no longer going to lose, and we’re thinking of attracting new capital, but we’re going to make a quick profit and continue this trend,” he added.
He noted that in Turquoise, they had hosted more than 170 foreign investment groups over the 18 months after JCPOA, most of them coming from Europe. According to him, the Chinese are looking for the trade in Iran, not investment, and of these 170 groups, not even one group came from China.
He added, “Snapp doesn’t need to enter the stock market, and it’s important to throw away the idea of the IPO of Snapp and other major Iranian startups for the next two years.”
Mr. Ashtiani also pointed out that the estimated investment in the startups of Iran is less than $700 million. Startups should be thinking of a profitable business model, not a growth one.
He added: “The Iranian stock market doesn’t have the readiness and mechanism of entering startups, and at least for the next two years, we should forget it.”