Statistics show nine out of 10 startups in Iran fail, Alireza Kolahi-Samadi, a member of Tehran Chamber of Commerce, Industries, Mines and Agriculture, told the news portal of the chamber. Below is a translation of what he had to say:
An investor who achieves 30-40% returns in the low-risk foreign exchange or real-estate markets will definitely not enter the realm of venture capital.
A report by the Iranian Venture Capital Association shows that 7,500 billion rials ($26.8 million) in venture capital were provided to startup companies in the last Iranian year [fiscal 2020-21].
During the first half of the current fiscal year [March 21-Sept. 22], a total of 30 VC businesses were established in Iran’s startup ecosystem. In truth, the state of venture capital financing in Iran is not desirable.
In all developed countries, such financing is the driver of development, innovation and economic value creation. But in Iran, regrettably, the total value of venture capital financing matches the cost of building a tower in Tehran’s District 1.
Our economy is property-oriented; investments have been concentrated in unproductive sectors. One of the signs of this condition is the existing housing bubble.
Lack of venture capital in Iran has led to investment in and profit-making from speculative practices and trading in foreign currency, gold coin and real-estate markets. Also, the short-lived excitement about VC financing [of a few year ago] is another reason behind the absence of growth in Iran’s startup ecosystem.
Pioneering startups in Iran have yet to enter the stock market. It’s two years now since the announcement was made about them [Snapp, Digikala and TAPSI] making a debut in the stock market, but no one asks why this is not happening.
I was asked whether 250 trillion rials ($862 million) is a high price for a startup like Digikala. This comes as the likes of Digikala are priced at $3-5 billion according to international standards. It [250 trillion rials] is the price of an office building in Tehran.
Why should a startup, which has been expanding and developing for 10 years, have a lower value?
Statistics show nine out of 10 startups have failed. An investor who achieves 30-40% returns in the low-risk foreign exchange and real-estate markets will definitely not enter the realm of venture capital.
The oil era is coming to an end; the world is changing with breathtaking speed. Today is not the time to sell oil to supply essential goods to people. Oil-oriented economies should be replaced with productive, diverse and creative economies.
One of the drivers of diverse, creative economies is the growth of venture capital. Failure to expand such an economy would result in brain drain increasing from the country, as our economy does not provide leeway for the financial growth of elites and skilled and educated human resources.
