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Iran: The Next Startup Revolution?

June 03, 2015

The iBridges conference is taking place in Berlin this week. Billed as "the biggest gathering of Iranians" outside the Islamic Republic in more than 30 years, politics is taking a back seat as the event will bring together European and American entrepreneurs and their counterparts in Iran to, in the words of organizers, "explore the role that a high-tech entrepreneurial ecosystem can play in Iran's economic development and diversification." Among the speakers will be GENBAND Senior Vice President of Marketing Communications, Bita Milanian.  

If diplomatic negotiations can deliver a solution to resolve Iran's desire for nuclear power with the international community fear of nuclear weapon development, the lift of current sanctions could open up the country for foreign investment into the tech sector.

Hundreds of Iranian startups are expected to participate in the iBridges conference, according to a piece in The Guardian, including Digikala, an online e-commerce platform with about 750,000 unique visitors per day and Aparat, the Iranian version of YouTube. 

Iran is an untapped hotspot of tech development activity.   At least half of Iranians have access to a smartphone and 70 percent of the population is under 35.   Estimates of more than 45 million Internet users in Iran -- almost half the total number in the whole Middle East -- are a part of a larger picture where in-country development of websites and startup have flourished.

Holding back budding Iranian entrepreneurs from growing is access to capital.  Sanctions have cut off Iran's banking system from the rest of the world, with no way to transfer money in and out of the country.  Tech startups also have to face censorship and filtering by the Supreme Council of Virtual Space.  Millions of Iranians find ways around blocked websites with help from proxies or VPN services, but the authorities have responded by fine-tuning filtering algorithms.

Milanian will address the potential upside and limitations for tech developers at the conference. Growth is happening everywhere around the world.  By the year 2020, more than half the people on the planet will be connected. Some markets are growing faster than others, with relationships to population growth as well as investment dollars in those markets -- those getting billions and trillions are going to grow faster.

On the flip side, the half who are connected will have more than four devices each on average.   Challenges remain when it comes to the distribution of resources and the digital divide for those who don't have the means to get online.

But firms are building capacity and investing in developing markets all the same -- making Iran a particularly interesting opportunity should it open up for foreign investments.   IBM, Microsoft, and Orange are a few of the companies currently putting resources into Africa as part of a long-term growth strategy now that returns in Europe and Asia have smoothed out.   Milanian cited the large number of fiber optic projects around and across Africa, indicating the willingness of telecommunications companies to make capital investments with an eye to long-term returns. 

Edited by Stefania Viscusi

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