* Iran hoping for easing of sanctions
* Start-up financing can still be hard to find
* Iranian Internet hopefuls gather in Berlin
By Georgina Prodhan
BERLIN, June 5 Tohid Tasoujian is a co-founder
of online fashion store Taxi Moda and one of a growing breed of
Internet entrepreneurs in sanctions-hit Iran.
He set out his stall this week at a conference of more than
80 Iranian start-ups in Berlin, the biggest event of its kind
outside Iran, as the country gears up for a possible easing of
sanctions imposed because of its nuclear programme.
A graphic designer, Tasoujian went back to school three
years ago to study for an MBA at the University of Tehran. When
he graduated, ecommerce was on the rise, and he persuaded a
friend to found the digital shopping platform with him.
"I liked graphic design but I thought: 'We can do more,'"
the 38-year-old told Reuters.
The desire to do more is gripping an increasing number of
young, tech-savvy Iranians, who have used their country's
isolation under U.S. and EU sanctions as well as domestic
censorship of foreign rivals to develop home-grown versions of
Amazon, eBay or YouTube.
A support system of mentors, seed funders and
venture-capital funds has begun to take shape, but financing can
still be hard to find and, while Iran produces many top-class
computer engineers, business experience is still scarce.
"Access to finance for start-ups is still at a very nascent
stage," Mohsen Malayeri, co-founder of the Iran Entrepreneurship
Association, told Reuters at the iBridge conference.
"We have talented engineers but understanding market
dynamics is different."
Some Iranian start-ups have flourished with backing from
Sarava, Iran's first venture-capital fund, which has invested in
online retailer Digikala and Google Android app store Cafe
Bazaar, two of Iran's best-known Internet companies.
Digikala went on to attract a $10 million investment from a
European fund last year, making headlines as this valued the
company at $150 million, while Cafe Bazaar's co-founder Hessam
Armandehi is a poster child for Iran's high-tech scene.
"We tried to create a Silicon-Valley culture inside Iran.
It's a hard thing to create. It's very different from the
mindset of investors and the government there," said 29-year-old
Armandehi, who has founded two other start-ups.
Cafe Bazaar, which offers mostly Iranian apps for social
media, messaging and other uses, is already used by 21 million
of Iran's estimated 30 million smartphone owners and is growing
at a rate of about 35 percent every quarter, Armandehi said.
His example has given hope to other entrepreneurs that they
need not leave Iran to find success in the United States or
Europe - as many continue to do in a brain drain that has been
going on for decades.
That is also the hope of the conference's organisers, a
community of expatriate Iranians that started in Silicon Valley,
home to many prominent entrepreneurs of Iranian origin including
former eBay chairman Pierre Omidyar and ex-Yahoo
technology chief Farzad Nazem.
"We said maybe we should hold a conference because whenever
Iran is mentioned in the media it's always bad news," said
iBridges core member Kamran Elahian, co-founder of multiple
start-ups including Cirrus Logic and now primarily a
venture capitalist and philanthropist.
The first iBridge conference was held at the University of
California, Berkeley, last year and just 20 Iranians managed to
get visas. A key reason for holding the next one in Berlin was
the German government's willingness to give 300 visas, he said.
Silicon Valley angel investor Dave McClure, a friend of
Alahian's, was a star attraction at the Berlin conference and
found himself surrounded by dozens of hopefuls frantically
pitching their companies.
McClure, though, said he had no imminent plans to invest in
Iran, although its 81 million-strong population dominated by
well-educated people under 35 made it an intriguing prospect.
"I'm here to meet people who are interesting and smart," he
told Reuters. "We will do some investment in Iran as soon as the
U.S. lets us."
That cautious approach is echoed by most, but not all,
The European fund that bought the Digikala stake - which has
not gone public about its investment - got a licence from its
home government because the business was not in a sanctioned
industry. But the process was difficult, said Griffon Capital
co-founder Xanyar Kamangar, who advised on the deal.
And Germany's Rocket Internet, which is building a
global ecommerce empire by replicating proven Internet
businesses in emerging and frontier markets, is poised to enter
Iran through a joint venture with South Africa's MTN.
The venture, Middle East Internet Group (MEIG), was founded
in 2013 and has operations in six countries in the region,
mainly in the Gulf. Telecoms operator MTN is a minority
shareholder in Iranian carrier Irancell.
MEIG however is not operating in Iran yet, a Rocket
Any lifting of sanctions is to be welcomed but will be a
mixed blessing for Iran's still-fragile high-tech scene, said
Malayeri, who runs a start-up accelerator firm alongside his
work at the Iran Entrepreneurship Association.
Asked whether the industry was resilient enough to withstand
an influx of companies such as Rocket, he said: "Not yet."
"This year will be a tipping point," Malayeri said. "We
either win or we lose the whole thing."
(Additional reporting by Sam Wilkin in Dubai; Editing by Giles