Candid takes on Iraq's startup ecosystem

By Amer Salih

Al-Shaheed monument in Baghdad

The Realistic Optimist is a publication making sense of the globalized startup scene.

About the author of this op-ed:

Amer Salih is the founder of iQ Cars, an Iraqi car marketplace. Before launching iQ, Amer was Toyota Iraq’s marketing general manager. 

Originally Iraqi, Amer grew up in Sweden and graduated from Uppsala University.

The premises

Recent history has made Iraq an unlikely “thriving startup ecosystem” candidate. Saddam Hussein, deposed in 2003, left a socialist heritage that still taints the economy today. Financed by oil wealth and employing nearly 40% of Iraq’s working-age population, the heavy public sector stymies the private one.

Nevertheless, the premises of a local startup ecosystem emerged in the 2010s with the opening of co-working spaces and the organization of startup events. In 2019, Lezzoo became the first Iraqi startup to join Y-Combinator. The past couple of years have seen a handful of e-commerce/food-delivery startups raise tangible VC rounds. Baly raised north of $10M, TipTop raised $5M and Alsaree3 raised over $3M.

Yet, to truly grow, the ecosystem has to address key structural challenges.

Talent & outdated business culture

For a startup ecosystem, talent is everything. In Iraq, promising talent is prone to getting scooped up by the government or a large local corporation. The latter often replicates the government’s managerial style. Talent from both of these institutions doesn’t acquire the adequate mental frameworks to either start or join a tech startup.

Another option for that talent is to join one of the foreign companies operating in Iraq, which ranges from Chinese conglomerate Huawei to Emirati tech startup Talabat. While arguably a better launch pad for startup talent, the presence of these well-funded employers out-competes what under-resourced Iraqi startups can offer potential recruits.