{"id":217,"date":"2026-06-01T11:40:50","date_gmt":"2026-06-01T11:40:50","guid":{"rendered":"https:\/\/commercialrelocationpros.com\/?p=217"},"modified":"2026-06-01T11:40:50","modified_gmt":"2026-06-01T11:40:50","slug":"iran-had-a-thriving-tech-industry-then-the-state-stepped-in","status":"publish","type":"post","link":"https:\/\/commercialrelocationpros.com\/?p=217","title":{"rendered":"Iran Had a Thriving Tech Industry. Then the State Stepped In."},"content":{"rendered":"

Once upon a time,<\/span> Iran had a tech scene as vibrant as any in the world\u2014one full of inventive young people, visionary entrepreneurs, expatriated mentors, and investors who spanned continents. American sanctions conferred a peculiar advantage, because dominant tech firms such as Uber and Amazon couldn\u2019t function in Iran. Iranians could fill this open field with their own inventions.<\/p>

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The story of Iran\u2019s start-ups could have been a triumphant one for Iran\u2019s private sector, and for a young generation seeking opportunity and connection with the outside world. Instead, this is a story of thievery. Whatever Iranian entrepreneurs and investors produced, their government was determined to take from them.<\/p>

To uncover this history, we spoke with more than 70 people inside and outside Iran, and examined thousands of pages of once-secret government and corporate records and emails. During five years of reporting, we learned that the saga of Iran\u2019s tech sector is a capsule tale of how the country\u2019s economy came to be dominated by unaccountable powers, in a society governed by fear.<\/p>

Said Rahmani<\/span> often compared his life story to the plot of Paulo Coelho\u2019s novel The <\/em>Alchemist<\/em>, in which a young shepherd sets off on a long and winding journey to find his treasure, only to learn that it was buried near his home all along.<\/p>

Said grew up in Iran in the decade and a half before the 1979 revolution and left for America shortly after it. He was educated abroad, got his dream job at IBM, then gave it up to launch a cutting-edge start-up in the data-storage industry. By 2011, he had returned to Tehran\u2014first to scout investment possibilities for an international investment firm; then, when the firm backed out, to start a venture-capital fund of his own.<\/p>

Said was clean-shaven, with close-cropped, graying hair and thin, rectangular glasses. He was charismatic, hardworking, and relentlessly optimistic. In Iran, he identified a handful of promising start-ups: platforms for e-commerce, video sharing, payment, travel, classified ads. His fund, called Sarava, would not only invest in such efforts but provide them with mentorship, so as to nurture a whole new ecosystem of local entrepreneurs.<\/p>

Sarava\u2019s most successful endeavor was a consumer-electronics site called Digikala. Its founders were Hamid and Saeid Mohammadi, the identical twin sons of a bread baker. To launch Digikala in 2006, one brother sold his car, and the other used money earmarked for his wedding. They operated out of an office that their older brother had lent them, and workers made deliveries around Tehran on motorized scooters.<\/p>

Said put a little more than half of Sarava\u2019s initial funds into Digikala, giving his firm a 51 percent stake in the company. With that investment, Digikala evolved from an electronics-focused website that appealed mainly to geeky teenage boys into an all-purpose retailer\u2014the Iranian version of Amazon. It set up distribution centers throughout the country and offered next-day delivery. Soon enough, even Iranians who had almost no experience buying online were ordering from Digikala. By late 2014, the company was receiving 3,000 orders a day and was valued at $150 million.<\/p>

Sarava also backed an accelerator called Avatech, which offered fledgling companies mentorship, workspace, and funding in exchange for a minority stake. Hundreds of teams applied. Among the chosen founders were some who had pictures of Supreme Leader Ali Khamenei set as their screen saver, and others whose friends had been jailed during opposition protests.<\/p>

Iranian engineers faced challenges that their counterparts elsewhere in the world did not. Because of banking sanctions, they had no direct access to credit cards. This made purchasing foreign products and services exceedingly difficult. Engineers had to come up with their own substitutes for some of the basic tools that other developers use to store code, launch websites, and set up servers. Still, the tech sector boomed. Online shops and ride-hailing services appeared seemingly out of nowhere, and domestic publications sprouted up to cover an industry that formed practically overnight.<\/p>

Suddenly, a new mobility seemed possible in a country where it had always mattered a great deal who your parents were or where you came from. In the tech industry, even the sons of a bread baker could be wildly successful. The Mohammadi brothers began dreaming of expanding outside Iran.<\/p>

Because the start-up sector was so new and growing so fast, the government had little control over it. The tech industry was \u201ca pocket where people can actually decide how they want to lead a team, how they treat women in the team, how they handle headscarf rules in the office,\u201d a European executive who worked in the sector told us. \u201cWe were so much under the radar that we could do things.\u201d<\/p>

In 2015, a company in Avatech\u2019s first cohort produced a music video filmed in the Avatech offices. It adapted the music of Queen\u2019s \u201cWe Will Rock You\u201d with Persian lyrics to capture the start-up founder\u2019s lonely but rewarding path: \u201cMany say it won\u2019t work. You say it will. Now go show them who\u2019s got it right!\u201d Founders of Avatech\u2019s mentee companies, seated in front of their laptops, clapped and banged their hands on tables to the distinctive stomp-stomp-clap<\/em> beat of the song as an electric guitar wailed.<\/p>

The day after the video was uploaded, one of Said\u2019s colleagues received phone calls from people he knew, admonishing him and saying that the video was being interpreted as promoting Western culture. This was an early warning of trouble to come.<\/p>

Very little<\/span> of Iran\u2019s economy can accurately be described as belonging to the private sector. Many of the country\u2019s largest industries operate through companies owned by the Islamic Revolutionary Guard Corps. Others are subsidiaries of conglomerates, known as bonyads<\/em>, that answer to the clergy. These powerful entities ward off competition through implicit or explicit threats.<\/p>

When Said started Sarava, he looked for the most independent private investors he could find. One was a former Rhodes scholar who had returned to Iran and set up an investment fund in 2005. Other Sarava investors had made or inherited fortunes in textiles, pistachios, and junk food, in some cases prior to the revolution. But certain connections to the state\u2014if indirect ones, through its banks\u2014were inevitable.<\/p>

At the outset, the tech companies operated in a legal space that the country\u2019s antiquated commercial code had not yet mapped. This meant that they were neither governed nor protected by any applicable law. The advantage in this redounded more to the regime than to the enterprises: The state had a propensity for arbitrary enforcement and petty bribery, and it had many levers that it could pull to interfere with private companies.<\/p>

Still, the tech-boom years\u2014the mid-2010s\u2014largely coincided with an optimistic moment in Iran. Former President Hassan Rouhani was courting a nuclear deal with the West that held out the promise of sanctions relief, and the tech scene had allies inside the elected government. Sorena Sattari, Rouhani\u2019s vice president for science and technology, presented himself as a tech enthusiast. His family had ties to the supreme leader, which made him a trusted insider with influence beyond his official posts. Behind the scenes, he served as an informal adviser to the start-up sector, meeting with Said and other executives.<\/p>

As the negotiations over the Iran nuclear deal neared completion in 2015, foreign investors\u2019 interest in Iran reached a frenzied pitch. Said believed that Sarava needed $100 million to fund the transformation that he had in mind for Digikala. He raised more than twice that amount.<\/p>

Iran\u2019s tech industry was now the hottest scene in the country, and Sarava, for better or worse, was at its core.<\/p>

The turning point<\/span> came in the late summer of 2015, just after the Iran nuclear deal was concluded. Khamenei delivered a speech to hundreds of uniformed IRGC commanders, extolling their virtues and imparting a warning: The enemy was looking to infiltrate the country. This infiltration could be economic, political, or cultural. In another speech a few weeks later, Khamenei used the word for \u201cinfiltration,\u201d nofooz<\/em>, 54 times and spoke of American-linked networks of economic influence inside the country.<\/p>

The nuclear deal had raised the prospect of true connection to the rest of the world, and Khamenei wanted none of it. The start-up scene, with its conferences, workshops, and accelerators; its Silicon Valley\u2013like culture; its foreign investors and advisers; looked to him and others like the leading edge of such a threat.<\/p>

Soon, representatives of the security services began spooking entrepreneurs with public attacks, interrogations, and arrests. Then, opportunistic middlemen, with one foot in the private sector and the other in the security state, offered the founders protection\u2014in return for a piece of their fast-growing companies. It was a squeeze play.<\/p>

Around 2016, a mysterious account appeared on social media. It was called Shabnaameh<\/em>, the Persian word for \u201csamizdat,\u201d and its posts were written in the furtive style of a brave truth teller going up against a shady establishment. It appeared to have been created deep within the security state close to Khamenei as part of a backlash against the nuclear deal. Among its targets was the tech industry, which it painted as part of a network seeking U.S.-backed regime change. The account named Said and Sarava as holding \u201cessential roles in the change project.\u201d<\/p>

Toward the end of 2016, Shabnaameh released a docudrama that purported to reveal the start-ups\u2019 links with the West. The names of Said, Digikala, and Avatech appeared on a poster advertising the film. The movie itself featured a clip from the \u201cWe Will Rock You\u201d music video that had been filmed in Avatech\u2019s offices, and it included a brief appearance by an Iranian American businessman, Siamak Namazi, who was then being held prisoner by the IRGC. Namazi sat against a black background, looking thin and drawn, his voice faint. No ordinary filmmaker could have gotten access to such a high-profile prisoner.<\/p>

Said tried to allay the security forces\u2019 concerns about Sarava by pursuing deals with regime moneymakers. He approached companies that were not under sanctions, but still partly owned by bonyads<\/em> close to the establishment, for investment. But those talks went nowhere. According to one source in a position to know, the security forces had advised the bonyads<\/em> to stay away from Sarava: Said was someone the regime could not trust or control.<\/p>

He was called in for interrogations, nearly weekly, for more than a year. His nerves were frayed and his sleep suffered. He didn\u2019t know whom to trust and could not banish the suspicion that those around him were informing on him. He tried to convince his antagonists of the good that Sarava was doing for the country. He set up meetings with influential people inside and outside the government. But these efforts only seemed to fuel the suspicions about him.<\/p>

Compared with<\/span> the state-owned behemoths that pumped oil or forged steel, the Iranian start-up sector was never especially lucrative. But the tech companies did have one source of wealth that intensely interested the regime: data about Iranians\u2019 daily habits. Sometimes the companies received official judicial letters asking for specific information that could help solve a crime. Other times, mysterious authorities simply called the executives and asked for broad user data spanning certain periods.<\/p>

Many executives found ways to rationalize complying with these demands. If they refused, their companies\u2014and all of the well-paying jobs they provided for young Iranians\u2014would be at risk. But they could not avoid the cognitive dissonance. They saw themselves as open-minded, modern, and liberal. That self-conception clashed with what they were being asked to do. \u201cThis is where you crack as a person,\u201d one executive told us. \u201cYou realize that there is no running away from this thing. You\u2019re part of it.\u201d<\/p>

Iran\u2019s tech entrepreneurs had built their businesses on a paradox. They were inspired by the Silicon Valley mythos of fierce competition, user-first design, and disruption. But Silicon Valley had arisen in a time and place where access to infrastructure, especially the internet, was relatively free and open. Iran\u2019s economy was built on closed networks.<\/p>

When the start-up wave reached Iran\u2019s shores, it encountered extensive internet censorship, strict limits on access, and an anticompetitive philosophy that permeated the private sector. At first, tech companies could survive, and even thrive, within these bounds. But they quickly found that the restrictions were eating away at their core. Law-enforcement officials had enormous control over whether start-ups lived or died. They determined which apps could be downloaded, which products were sold, and whether websites could even be seen by the public.<\/p>

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Under the circumstances, many companies went to lengths to make peace with the authorities. One, a ride-hailing app called Tapsi, launched with investment from IRGC financiers. Another ride-hailing app, Snapp, sold some of its shares to a bonyad<\/em>-owned telecom. Some tech executives helped regime censors control the internet that Iranians had access to.<\/p>

One of Sarava\u2019s founding investors suggested that Said invite a man onto the board whose presence could ease the company\u2019s problems with the regime. The investor said, \u201cThis guy can talk the language,\u201d Said recounted later. He agreed to do it, thinking that one board seat out of seven was not much to give up, if it would show the regime that Sarava was not a threat.<\/p>

One day, that board member came to Said with an offer. Sarava could solve its problems, he said, if Said agreed to give up 15 percent of his shares. Said asked him for more details: Who was making this offer? On whose behalf was he working? The board member demurred. Said refused the offer. But the message it sent was clear: Only by giving up a piece of his company could he ever hope to be safe.<\/p>

In December 2017,<\/span> Said took some of his executives on a corporate retreat on the Iranian island of Qeshm, a fishing community with salt caves, mangrove forests, and dramatic canyons.<\/p>

With the team was Emad Shargi, an affable, handsome Iranian American businessman. Shargi was not a Sarava executive, but he sometimes served as an informal, unpaid adviser.<\/p>

On the last day of their trip, during their final excursion, the executives learned that their minibus had been broken into. They found a rock the size of a cantaloupe outside the bus, surrounded by shards of blue-green glass. Missing from the bus were a few bags, including Shargi\u2019s, which held his American and Iranian passports.<\/p>

The burglary was almost certainly staged by the security services, perhaps as a warning. But Shargi was not particularly concerned. Other people\u2019s bags had also been taken, and within weeks, he was able to get new copies of his passports. Not long after, he and Said left Iran together to meet with investors in Europe.<\/p>

When Said returned to Iran in late January 2018, his passport was confiscated at the airport. The authorities alleged that Sarava had engaged in money laundering, and that its foreign investments were fake. They made the company turn over reams of documents. He warned Shargi to stay away, but on March 18, Shargi, too, returned to Iran to celebrate the Iranian New Year.<\/p>

At about 2 a.m. on April 24, 2018, the guards working the night shift in a crowded business district in northern Tehran witnessed what looked to them like a heist. Men were prowling around inside Sarava\u2019s headquarters, housed in an office building whose distinctive facade resembled the geometric designs of Islamic art.<\/p>

But it was not a robbery. The men were IRGC agents, and with them was Emad Shargi. Two hours earlier, armed agents had ransacked the home where he was staying, stuffed Shargi into the back seat of one of their Peugeot sedans, and brought him to Sarava, where they kicked the door open.<\/p>

In garbage bags and boxes, the agents carted away nearly everything that wasn\u2019t bolted down and some things that were, such as the large flatscreen monitors in the conference room. They sealed the office door with a sticker stating that the office had been closed following \u201can order from an honorable judiciary official.\u201d They dipped Shargi\u2019s finger in black ink and forced him to sign and fingerprint a judicial document laying out some of the items they had taken. They then took Shargi to prison.<\/p>

Over the next eight months, Shargi was interrogated for hundreds of hours. One interrogator asked him insistently about Sarava\u2019s investors. Shargi knew few of these details, and he told the officers so. And Shargi was honest about what he thought of Said and the work he was doing. He felt that Said\u2019s talents, devotion, and deep love for his country had been squandered by the Islamic Republic.<\/p>

\u201cIf this country had 1,000 Said Rahmanis, we would have a different country,\u201d he told them.<\/p>

One by one,<\/span> the Iranian tech founders immigrated to Europe and North America. Not the Digikala brothers\u2014they stayed in the country, though they appeared despondent.<\/p>

\u201cYou never had that feeling of courage, that feeling of self-confidence, the feeling that Elon Musk has, that Mark Zuckerberg has,\u201d Saeid Mohammadi later said publicly. \u201cThe feeling that you\u2019ve become successful in your own country.\u201d<\/p>

In May 2019, Said left for the United Kingdom, intending to return. But while he was abroad, he learned of a letter that a government ministry had sent to one of Sarava\u2019s portfolio companies. It stated that the company was barred from using certain government services unless Said was ousted from its board of directors.<\/p>

In another letter, an intelligence official in Tehran\u2019s municipal government directed the municipality\u2019s subsidiary companies and organizations to stay away from Sarava and its portfolio.<\/p>

At the next shareholder meeting, in mid-July, Said stepped down as chief executive and board member of Sarava, in the hope that the portfolio companies could continue to operate. The regime had won this round. Shareholders chose Sarava\u2019s new board and CEO from a list that company executives had shared ahead of time with an intelligence official. The firm also pledged to vet the board members of its portfolio companies \u201cin coordination with the relevant authorities,\u201d a senior Sarava executive wrote to the same intelligence official three days later. The executive shared the names of the newly chosen Sarava board, adding: \u201cIf any of the nominated individuals are not deemed suitable, kindly instruct that another qualified person be chosen by the shareholders and introduced by the aforementioned committee.\u201d<\/p>

Would such a compromise really save the company? In mid-August, Said wrote to Mahmoud Alavi, Rouhani\u2019s intelligence minister, and Hossein Taeb, the head of the IRGC\u2019s intelligence wing, as well as to Sattari, the president\u2019s vice president for science and technology. A pained question lay at the center of the letter: What exactly had Said or Sarava done to deserve the treatment they had received from authorities? Sarava had told its portfolio companies to pay their taxes, be transparent, and maintain clean books, even when it caused them trouble.<\/p>

\u201cOver the past eight years, I have acted on the basis of transparency, human dignity, and a profound belief in human principles, with reliance on the God almighty,\u201d Said wrote.<\/p>

He soon received a response of sorts. On August 21, Taeb wrote to the head of one of the most powerful bonyads<\/em>. Given \u201cthe security issues and concerns\u201d surrounding Sarava, the bonyad<\/em> was to refrain from signing any agreements with Sarava and its portfolio firms, including Digikala, and consider terminating any existing agreements, Taeb wrote.<\/p>

The letter reached Said. It was confirmation, in case he needed any more, that none of his pleadings had made the least bit of difference.<\/p>

Sarava was being eliminated<\/span> from Iran\u2019s tech scene. Years of unrelenting pressure\u2014smear campaigns, interrogations, arrests, a violent raid, and underhanded attempts at control\u2014had succeeded in breaking it.<\/p>

In 2020, Digikala needed a cash infusion. One interested investor was a major Iranian telecom company owned in part, through layers of subsidiaries, by Setad-e Ejrayi, a bonyad<\/em> controlled by Khamenei. Digikala and Sarava turned the offer down and tried to move forward by going public on the Tehran Stock Exchange or by attracting other investors\u2014only to find their way blocked at every turn. A meeting with the regulatory committee that oversaw public offerings was canceled, with no explanation. Any buyer that showed interest\u2014even those with their own connections to the government\u2014was warned away by the security forces.<\/p>

Toward the beginning of 2024, the telecom company approached Digikala again with an offer to buy a majority of its shares. Almost simultaneously, Tehran\u2019s prosecutor filed a criminal complaint against Digikala, claiming that it was selling items that insulted holy figures. The items were mugs featuring cartoon drawings, with common Iranian names such as Fatemeh and Maryam, some of which happened to be names of religious figures. This was a weak case for blasphemy. Nonetheless, a Digikala executive was briefly jailed, and others were summoned for respectful, but still threatening, meetings with the police.<\/p>

The Digikala brothers concluded that they had no choice but to sell a minority stake in the company, because if they didn\u2019t, \u201csooner or later some disaster would befall them,\u201d one person who knew them told us.<\/p>

The deal pegged Digikala\u2019s value at approximately $550 million. Said and another person aware of the talks viewed this as a gross undervaluation. And by the time all of the money was handed over, Iran\u2019s currency had slid some 30 percent in value, making the purchase an even bigger bargain.<\/p>

One person with knowledge of the deal described it in terms that resonated with the fate of the start-up industry as a whole: \u201cIt was more a confiscation that took place, rather than a purchase.\u201d<\/p>

This essay was excerpted from Yeganeh Torbati and Bozorgmehr Sharafedin\u2019s forthcoming book, <\/em>Stolen Revolution: Betrayal and Hope in Modern Iran.<\/small><\/p>

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Stolen Revolution: Betrayal and Hope in Modern Iran<\/div>
By Torbati, Yeganeh and Sharafedin, Bozorgmehr<\/div><\/div>