A new study shows that only 0.6 percent of Iranian startups are targeting the international market. The study also indicates that e-commerce is the hottest startup sector in the country.

A new research by ICT Startups Empowerment and Facilitation Center (ISEFC) which is a division of Iran Information Technology Organization has analyzed the state of Iranian startups. This field report was conducted with the help of Research Innovation Center of Digital Business of Tehran University in the second quarter of the Persian year 1395 (October 2016 to March 2017) from the participants of Elecom Stars 2017, an exhibition and startup event in Tehran. 214 people consisting of startup founders and activists participated in this survey.

 

E-commerce, the hottest startup sector in Iran

According to this study, 17.8 percent of Iranian startups are focused on the e-commerce sector. The popularity of e-retailers among the public and its promising future is probably one of the main reasons for this sector’s activity. 12.2 percent are focused on providing technical and ICT services, 10.8 percent on consulting, education and entertainment, 7.5 percent on information, advertisement and news, another 7.5 percent on developing databases of people and businesses, 6.6 percent on FinTech and 5.6 percent on transportation and logistics. According to this study only 3.6 percent of Iranian startups are targeting HealthTech and 3.8 percent the tourism industry.

 

Young startup ecosystem

The Iranian startup ecosystem is still young but is showing a promising expansion. 32.2 percent of the people who participated in this study said that their startup is between 6 months to one year old. 27.2 percent said that their startup is younger than 6 months old, while 28.2 percent said that their company is between one to three years old. Only 8 percent of the companies in this study were established over three years ago.

 

Small teams mostly consisting of founders

According to this research, 84 percent of the people who participated in this study were a startup founder. 8.5 percent said that they were working for a startup and 5.6 percent were interested to work in one and 1.9% had other roles.

 

Iranian startups’ development stages

Almost half of the Iranian startups (49 percent) are in their market entry stage. While 23.4 percent are in their growth stage and are making revenue, 15.6 percent have built a prototype/MVP, 11.5 percent are expanding to new markets and 0.5 percent have reached maturity. Organizational structure, a steady source of income and scaling could be an indicator of this maturity.

 

Only 0.6 percent of Iranian startups are targeting the international market

This study shows that 51.4 percent of Iranian startups are targeting the entire country, while 39.5 percent are targeting the provincial market and 7.3 percent their local market. Interestingly only 1.1 percent of Iranian startups are targeting the regional market, and 0.6 percent are targeting the international market.

International sanctions and difficulties related to money transfer are the major reasons for Iranian startups to work locally. Despite these issues, there are startups who have managed to successfully target the international market while still operating locally. These companies usually have another branch in a European country in order to be able to make the money transfer possible.

Related:

15 Challenges of Iran’s Startup Ecosystem

Iran Startups Problems & Solutions: Fundraising

Highlights of Iran’s ICT Achievements in the Recent Years

7 Things You Need to Know Before Doing Business in IRAN

What do you think about the Iranian startup ecosystem comparing to other countries in the region? How do you think the Iranian startups could thrive by entering new markets either in the region or further away markets?

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