This presentation covers the following subjects: - Innovation cycles and universal evolvement of technology - Iran's entrepreneurial opportunities - Iranian startup and venture investments scene

1. October 2019Masoud Hamidzadeh, VC Investments Associate
Iran’s Tech & Investment Scene

2. Innovation Cycles & Universal
Evolvement of Technology
Iran Opportunity
Iranian Startup & Venture
Investments Scene
©2019 Turquoise Partners2/27

3. Innovation Cycles & Universal Evolvement of Technology
Global PC installed base (bn)
PC Takeover
2.0
1.5
1.0
0.5
0.0
1985 1990 1995 2000 2005 2010 2015
Source: Apple, Google, a16z, TMW, ITU, World Bank©2019 Turquoise Partners3/27

4. Innovation Cycles & Universal Evolvement of Technology
Global installed base (bn)
S Curves
4
3
2
1
0
1985 1990 1995 2000 2005 2010 2015
PCs
IOS & Android
Source: Apple, Google, a16z, TMW, ITU, World Bank©2019 Turquoise Partners4/27

5. Innovation Cycles & Universal Evolvement of Technology
Global installed base (bn)
S Curves (Cont.)
4
5
3
2
1
0
1985 1990 1995 2000 2005 2010 2015
PCs
IOS & Android
Mobile Users
Source: Apple, Google, a16z, TMW, ITU, World Bank©2019 Turquoise Partners5/27

6. Innovation Cycles & Universal Evolvement of Technology
Global installed base (bn)
S Curves (Cont.)
4
5
6
3
2
1
0
1985 1990 1995 2000 2005 2010 2015
PCs AdultsIOS & AndroidMobile Users
Source: Apple, Google, a16z, TMW, ITU, World Bank
©2019 Turquoise Partners6/27

7. Innovation Cycles & Universal Evolvement of Technology
Recurrence of S Curves
PC
internet
Mobile
internet
©2019 Turquoise Partners7/27

8. Innovation Cycles & Universal Evolvement of Technology
Businesses Built on Top of These
Billion-scale Platforms
SEO, SEM, Social...
PC
internet
Mobile
internet
Ride-sharing, Instagram,
On-demand..
©2019 Turquoise Partners8/27

9. Innovation Cycles & Universal Evolvement of Technology
Innovation Gets Boring But Never Dies
Innovation is
dead
Innovation is
dead
PC
internet
Mobile
internet
©2019 Turquoise Partners9/27

10. Innovation Cycles & Universal Evolvement of Technology
`What now?` and `What next?`
Innovation Paths
What can we build on
the billion-scale
platforms we have
today?
What are the next
S Curves - What will
the next platforms be?
©2019 Turquoise Partners10/27

11. Innovation Cycles & Universal Evolvement of Technology
There’s Always Something Else Coming
PC
internet ?
Mobile
internet
Bots? Voice? Smart Speakers? Wearables? Watches? Glasses? Smart home? Implants?
©2019 Turquoise Partners11/27

12. Innovation Cycles & Universal Evolvement of Technology
Access Story
100%
75%
50%
25%
0
Global adult penetration
1995 2000 2005 2010 2015
Source: Apple, Google, a16z, TMW, ITU, World Bank
Internet
Smartphone
©2019 Turquoise Partners12/27

13. Innovation Cycles & Universal Evolvement of Technology
Use Story
100%
75%
50%
25%
0
1995 2000 2005 2010 2015
Internet
Smartphone
Ecommerce
Global penetration
Source: Apple, Google, a16z, TMW, ITU, World Bank©2019 Turquoise Partners13/27

14. Innovation Cycles & Universal Evolvement of Technology
Hard Things Last
Most people
are online...
But most of the
money is not
New problems
Tackling harder
markets and
changing them
more
New structural
layers
After search &
social, now ML
and Crypto
©2019 Turquoise Partners14/27

15. Innovation Cycles & Universal Evolvement of Technology
Things that work with low
penetration & little capital
Low touch goods
Selling tools
Information arbitrage
Things that need high
penetration & lots of capital
High touch goods
Full stack
Information businesses
Shift From Easy to Hard
First 20 years Next 20 years
©2019 Turquoise Partners15/27

16. 16/27 ©2019 Turquoise Partners
Innovation Cycles & Universal Evolvement of Technology
Listing Forums to On-demand Fulfillment Giants
Low capital needs
Selling tools
Information arbitrage
High capital needs
Building the full stack
Information as system

17. ©2019 Turquoise Partners
Iran Opportunity
17/27

18. ©2019 Turquoise Partners
Iran Opportunity
Iran’s Demographics
Huge
82 million
population
Urbanized
75%
Young
Well-Educated
60% under 35
93% literacy rate
Robust Middle Class
%62 of total number of households
C. 3.4 million Tomans monthly income
Source: Statistical Center of Iran, IMF, Central Bank of Iran, Ministry of Information & Communication Technology, Techrasa
18/27

19. Innovation Cycles & Universal Evolvement of Technology
Iran’s Digital Infrastructure
Source: tatistical Center of Iran, IMF, Central Bank of Iran, Ministry of Information & Communication Technology, Reputable Media, Opendata.cra.ir
90.000.000
80.000.000
70.000.000
60.000.000
50.000.000
40.000.000
30.000.000
20.000.000
10.000.000
2000 2002 2005 2008 2009 2010 2012 2017 20182015
Internet Users Population
74,500,000
82,000,000
©2019 Turquoise Partners19/27

20. Innovation Cycles & Universal Evolvement of Technology
Iran’s Digital Infrastructure (Cont.)
%88Mobile internet%140Mobile Penetration%91Internet penetration
97mActive debit cards
Over
18$
BillionIran E-commerce market
Source: tatistical Center of Iran, IMF, Central Bank of Iran, Ministry of Information & Communication Technology, Reputable Media, Opendata.cra.ir
©2019 Turquoise Partners20/27

21. Innovation Cycles & Universal Evolvement of Technology
Iran’s Retail Opportunity
Iranian Market Value 2017©2019 Turquoise Partners21/27
Online < %1.5%98.5 < Offline
Iran's retail
100$B

22. Iranian Startup & Venture Investments Scene
©2019 Turquoise Partners22/27

23. Iranian Startup and Venture Investments Scene
Iran’s Startup Ecosystem CyclesStartups’AccessToCapital
• Massive demand for capital
• Venture investments have
....slowed down
• Volatile economic conditions
• Weak IPO market for technology
....company liquidity
2008-2013 2014 - 2017 2018 - Now
Joint
Comprehensive
Plan of Action Unilateral
Withdrawal
of the US
Local Venture Investors
• Incorporation of today’s major players
• Initial small yet effective investments
• Initiation of rapid developements in
....infrastructures
• Formation of startup ecosystem
....Establishment of first VC Firm
• Engagement from foreign investors &
.....deployment of foreign capital
• High demand for growth
• Mobile data coverage growth
• Ripe conditions for investment and
....explosive growth
23/27
Local Capital
Foreign Capital
Pre JCPOA Scarcity of International CapitalPost JCPOA
©2019 Turquoise Partners

24. 24/27 ©2019 Turquoise Partners
Iranian Startup and Venture Investments Scene
Sequoia Capital’s Email to Portfolio Companies (2008)
R.I.P Good Times:
Raise your funding as soon as possible
Pursue M&A opportunities
Be realistic on valuations
The VC community will start exercising their leverage
Source: Sequoia Capital

25. Iranian Startup and Venture Investments Scene
Strategies For Current Market Environment
Use a zero-based budgeting approach
Become cash flow
positive as soon as possible
Be open to
synergic
consolidations
Closely monitor your performance and your financial status
5
3
4
6
Focus on essentials & survival
Kill the cash burn (cash is king)
1
2
25/27 ©2019 Turquoise Partners

26. Iranian Startup and Venture Investments Scene
Survival of The Quickest
EXPENSES
TIME
COMPANY A
COMPANY B
DEATH SPIRAL
26/27 ©2019 Turquoise Partners Source: Sequoia Capital

27. ©2019 Turquoise Partners
THANK YOU FOR YOUR TIME