Iran Startup Pulse: January 10–17, 2025

Letter to the Startup Community

This week, conversations in Iran’s startup ecosystem revolved around investor sentiments, internet quality concerns, regulatory challenges, and notable business strategies. While challenges persist, there are glimpses of resilience and innovation across industries.

Investor Confidence Amid Challenges

Alireza Kolahi, head of the Industry and Mining Commission of Iran’s Chamber of Commerce, reaffirmed foreign investors’ commitment to Digikala, dismissing rumors about their exit. Pomegranate Investment and I hold an 11.7% stake in Digikala and have restated their long-term plans in Iran. Despite economic hurdles, this highlights the importance of maintaining transparency and operational excellence to instill investor confidence.

Interestingly, Digikala’s strategy to expand into physical retail through FMCG-focused supermarkets exemplifies the company’s adaptability. As they push into offline retail, one wonders how this hybrid strategy might influence their valuation as they prepare for an IPO. Will this diversification offset the structural challenges facing Iran’s digital economy?

The Internet: Opportunity or Obstacle?

The Tehran E-Commerce Association’s report painted a grim picture of Iran’s internet quality. Ranked 95th globally, the country struggles with high latency, restrictive policies, and limited infrastructure. With 84% of users reliant on VPNs and satellite internet adoption rising, policymakers face mounting pressure to modernize connectivity.

The report underscores the potential of HTTP/3 to significantly improve online retail conversion rates, with one second of load time delay equating to billions in lost revenue annually. Yet, the question remains: will infrastructure improvements materialize, or will businesses increasingly circumvent these challenges through alternative technologies like Starlink?

Policy Impacts on Startups

Snap’s updated policies banning unaccompanied minors from rides highlight a commitment to user safety. However, such measures' operational and legal enforcement could be a logistical challenge, particularly in regions where access to proper ID verification tools is limited.

Meanwhile, the Competition Council’s deliberations on Snap-Tap30 disputes reflect the complexities of fostering fair competition while avoiding overregulation. The council’s promise of transparency is encouraging, but one must ask whether the broader policy environment is conducive to nurturing trust within the digital economy.

Emerging Trends in Tech and Talent

The unveiling of Quera’s “State of Programming in Iran” report revealed intriguing insights into the programming ecosystem. Python remains the most popular language, while YouTube is the preferred learning platform. However, the stark gender imbalance (83% male participants) and limited professional experience (60% under three years) suggest untapped potential within Iran’s talent pool.

Similarly, Vista Holding’s strategic vision to harness “smart money” through IranCell underscores the importance of leveraging existing corporate infrastructure to propel startups forward. This approach could redefine how large corporates collaborate with fledgling ventures, provided there’s sufficient alignment of interests.

Final Thoughts

The juxtaposition of challenges and opportunities in Iran’s digital landscape is stark. Whether Digikala is navigating retail expansion or policymakers are grappling with internet reform, the ecosystem’s resilience is continually tested. The question for stakeholders remains: Will incremental progress suffice, or is systemic transformation the only way forward?

Highlights

? Investor Commitment: Pomegranate Investment and IIIC reaffirm long-term plans with Digikala.

? Internet Quality Concerns: Tehran E-Commerce Association calls for infrastructure modernization amid rising Starlink adoption.

? Safety Policies: Snap bans rides for unaccompanied minors to prioritize safety.

? Programming Insights: Quera’s report highlights Python’s popularity and the rise of YouTube as a learning platform.

? Corporate VC Innovation: Vista Holding leverages IranCell’s ecosystem for strategic startup support.

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