ICT Minister Sees Bright Future for Local Startups

EghtesadOnline: Unperturbed by the current economic volatility that Iran is grappling with, the ICT minister envisions a bright prospects for local startups saying he still believes that at least five Iranian startups will grow to become unicorns in the not too distant future.

News ID: ۷۴۵۸۹۶

18 August 2018

During a recent interview with online news service Peivast, Mohammad Javad Azari-Jahromi reiterated his commitment to the promotion of startups and addressed various hurdles such firms are struggling with.

Since US President Donald Trump pulled the country out of the historic Iran nuclear deal and reimposed sanctions against Tehran, many have questioned the fate of the local fledgling firms.

Previously, Azari-Jahromi had said hopefully during his tenure at least five Iranian startups will grow to become unicorns. Having in sight the current state of economic affairs in Iran, the minister was questioned about his earlier comments, Financial Tribune reported.

The young minister showing no sign of being flustered by the economic hardships says that “hopefully, he will see at least five Iranian startups to turn into unicorns in the near future.”

A unicorn is a startup company valued at over $1 billion. The term was coined in 2013 by venture capitalist Aileen Lee, choosing the mythical animal to represent the statistical rarity of such successful ventures.

Azari-Jahromi is of the opinion that “based on a gap analysis of Iran’s ICT sector, there is vast potential for expansion of local startups active in the field.”

In management literature, gap analysis involves the comparison of actual performance with potential or desired performance. The official says a detailed survey of firms active in the sector will soon be published which will help companies further realize their potential.

The survey will cover activities of Iranian IT firms as well. According to him, this would be the first report covering the sector to be published in Iran. He also points out that such concrete data can be used by professionals to plan for their future activities.

Azari-Jahromi added, “When I was named as new ICT minister [last year], I stated my commitment to the expansion of Iran’s IT sector. As I said at the time, unlike my predecessors, my top priority is not merely enhancing the communications infrastructure. My top priority is the information technology sector.”

Transparent Evaluation Mechanism

He also points out that “a clear mechanism does not exist for evaluating Iranian startups’ net value.”

“If major Iranian startups like Snapp, Digikala, Cafe Bazaar and even local messaging app Rubica were operating in another country [and were publicly owned], it would have been easier to evaluate their market value.”

In a recent statement, leading Iranian ride-hailing company Snapp announced that its value has surpassed $1 billion, a claim which met widespread criticism in online debates.

Azari-Jahromi says, “The value of startups is hard to estimate. Transparent economical mechanisms should be worked out for evaluating such companies.”

The minister is of the opinion that Iran enjoys enormous untapped capacities both in terms of natural resources, financial potential and human capital. “However, the startup ecosystem is ailing and needs extensive enhancement.”

He also restated his pledge to assist Iranian startups to overcome the problems which have hindered their growth, calling on other state bodies to also contribute to the expansion of such businesses.

Fundamental Change

The official further acknowledged that so as to enable Iranian startups to further grow and turn into unicorns, fundamental changes need to be made in the country’s business ecosystem.

Azari-Jahromi says, “Many still see startups as threats to national security. However, the general public view is changing with most praising startups as entities contributing to the general good.”

While sanguine about prospects for change, the minister does not fail to point out that there is much room for improvement.

In addition, Azari-Jahromi says since he took office, the ICT ministry’s structure along with entities operating under its authority including, the Post Bank and Iran’s Information Technology Organization, have been overhauled so as to become able to cater to the needs of startups.