Iran’s tech sec­tor blooms un­der shield of sanc­tions

Muscat Daily - - REGION -

Tehran, Iran - The names may be un­fa­mil­iar but the ser­vices are im­me­di­ately recog­nis­able: Snapp is Iran’s an­swer to Uber, Digikala is its Ama­zon, and Pin­tapin its Book­

US sanc­tions have pro­tected the Is­lamic repub­lic’s tech sec­tor, bar­ring Sil­i­con Val­ley from prof­it­ing from one of the world’s most promis­ing emerg­ing mar­kets, and giv­ing a free run to do­mes­tic start-ups to recre­ate their ser­vices.

Even some Cal­i­for­nian mumbo-jumbo has been im­ported: One booth at the Ele­comp tech fair in Tehran this week claimed it was ‘Cre­at­ing Ar­ti­fi­cial Mind­ful­ness’.

But don’t dare call them copy­cats - trans­plant­ing a for­eign busi­ness model to Iran is never straight­for­ward.

“It’s not a mat­ter of copy­ing code line-by-line,” said Ami­rali Mo­ha­jer (32), the chief op­er­at­ing of­fi­cer of Pin­tapin. “You need lo­cal ex­per­tise that has to be built from the ground up, and it might need an en­tirely dif­fer­ent busi­ness model to make it suc­cess­ful.”

His of­fice sits along­side sev­eral other fast-grow­ing start-ups in the of­fices of the Iran In­ter­net Group (IIG), a haven of north Tehrani hip­s­ter­dom where the jeans are skinny, the head­scarves loose, and 20-some­things sip espres­sos in glass meet­ing rooms.

Pin­tapin’s staff are not just build­ing a web­site, they are trans­form­ing Iran’s en­tire ho­tel in­dus­try. “Up un­til very re­cently, a lot of travel ar­range­ments were done com­pletely off­line through phone calls and faxes and tra­di­tional mod­els that re­ally be­long in the last cen­tury,” said Mo­ha­jer.

Half the com­pany’s time is spent con­vinc­ing ho­tels to give up pen-and-paper reser­va­tions and start au­tomat­ing their busi­ness.

Mo­ha­jer, who spent 16 years abroad in Bri­tain and Canada, says he came back to Iran be- cause it felt like a place where tech could have ‘an im­pact that ac­tu­ally mat­ters’.

“We re­ally be­lieve we’re work­ing to­wards cre­at­ing Iran’s right­ful place in the world­wide travel mar­ket... help­ing re­con­struct an Ira­nian iden­tity that’s been un­for­tu­nately dam­aged due to po­lit­i­cal is­sues.”

‘Peo­ple love it’

Across town, the huge hangars, strip-light­ing and shiny booths of the Ele­comp tech fair could be any­where. It is grow­ing rapidly: Its start-up sec­tion had 80 hope­fuls three years ago, now there are more than 400 - the usual mix of de­liv­ery apps, on­line shop­ping and games.

But global brands are al­most en­tirely ab­sent, the re­sult of se­vere US sanc­tions that re­main in place de­spite other coun­tries lift­ing re­stric­tions un­der a 2015 nu­clear deal.

Some Ira­ni­ans have found ways to profit from sanc­tions: one com­pany at Ele­comp buys Ama­zon prod­ucts from the US and ships them to Ira­ni­ans for a small sur­charge. “Peo­ple love it. There are many fake prod­ucts in Iran. When they or­der from us, they get the real thing,” said its spokesman Hamid Tavakoli.

But iso­la­tion has been a very mixed bless­ing. “There are two sides to the coin. When you are un­der sanc­tions, you have an op­por­tu­nity to do many things your­self,” said the fair’s or­gan­iser, Naser­ali Saa­dat.

“But gen­er­ally, it’s not a good thing... you can’t live like an is­land in this world.”

That view is echoed by Ger­man-Ira­nian Ramtin Mon­aza­hian, who came from Berlin in 2014 to found e-com­merce site Bamilo and taxi-hail­ing app Snapp. He may not have to worry about Ama­zon and Uber muscling him out of the way, but nor can he hope they will buy him up for bil­lions as hap­pens else­where.

More­over, he needs a thriv­ing retail sec­tor to un­der­pin his ser­vices, and sanc­tions ’hit the con­sumer area pretty hard. Pur­chas­ing power is suf­fer­ing... that’s hurt­ing all busi­nesses,’ he said.

Still, he sees huge po­ten­tial in a coun­try of 80mn peo­ple with a large, con­sumerist mid­dle­class. “It’s prob­a­bly the last big coun­try with no ma­jor com­pe­ti­tion,” he said.

Big­ger pic­ture

For­eign in­vestors have taken no­tice. Iran’s tech scene has at­tracted hun­dreds of mil­lions of dol­lars from firms such as South Africa’s MTN, Ger­many’s Rocket and Swedish com­pany Pome­gran­ate.

The real break­through is not nec­es­sar­ily the tech it­self, said Es­fand­yar Bat­manghe­lidj, founder of the Europe-Iran Fo­rum, but the forg­ing of these for­eign part­ner­ships.

“This is not just about dig­i­tal in­no­va­tion and young peo­ple think­ing en­trepreneuri­ally - which is some­what new in Iran - but also how ven­ture cap­i­tal can in­flu­ence the big­ger pic­ture of in­vest­ing,” he said.


Pin­tapin em­ploy­ees work at one of the e-book­ing site’s of­fices, in the Ira­nian cap­i­tal Tehran on July 9

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