Iranian ride sharing startup Snapp has secured a 20 million euro (US$22 million) Series A investment.
Snapp launched in October 2014, then known as Taxi Yaab, and is owned by Iran Internet Group. While it only operates in Tehran, it employs up to 10,000 drivers.
Snapp works in the same way as other popular ride sharing apps, but includes a pre-paid model which cuts out haggling.
Snapp CEO Shahram Shahkar told Wamda the investment had come on the startup’s two year anniversary.
“This funding will enable us to grow further in the country and to make this amazing service accessible to all Iranians. We as the first and leading e-hailing app that is developed completely in-house by Iranian talent, are proud of all we have achieved so far and look forward to consolidating our position as market leader with the continued strong support of MTN,” Shahkar said
A Rocket Internet venture?
The deal has all the hallmarks of being related to startup builder Rocket Internet, although both the German company and Shahkar categorically denied to Wamda any association with Snapp or its parent Iran Internet Group.
“We have zero relationship or partnerships in Iran and [are] not invested there,” Rocket told Wamda.
However, international media outlets have been reporting on connections between the German company and Iran since 2014.
The Financial Times and The Guardian noted a Rocket joint venture with MTN called ‘Romak’ that launched Bamilo, an ecommerce website within Iran Internet Group’s stable of startups. Reuters reported on Rocket’s entry into Iran last year.
Other Rocket Internet entities in the region are Middle East Internet Group (MEIG) and Africa Internet Group (AIG).
A source working in the Iranian startup ecosystem, who wished to remain anonymous due to some professional concerns, said there were valid reasons for Rocket to deny working in the country.
“They are afraid of the sanctions being in a grey zone that such scandal can bring down their market share value at a higher pace,” he said. “Local entrepreneurs mostly believe that this is yet just another Rocket type of venture where it ignores the local entrepreneurial scene and what local talents are already doing, they build a venture, offer insane salaries to people in startup world to turn them to employees and change the market.”
The source said the Snapp investment was encouraging, as it showed there was a real market in Iran for venture investors.
“We have seen a lot of improvement in the past couple of years. Mostly because of the local players stepping up to improve the scene by support from authorities believing that Iran as a talent market should move from creating wealth from natural resources, to creating it from the talents.
“Also the strategic foreign investment has been helpful to accelerate this phenomenon. I see a real distinction between an investment that turns to venture building by foreigners on one side (Uber is no different than Snapp from Rocket) and the investment that supports the local entrepreneurs strategically to grow and scale to the region.”
Feature image: Tehran and the Alborj mountains. (Image via Wikimedia Commons)