Investing for positive impact in emerging markets
Pomegranate seeks opportunities with highly attractive risk-reward profiles, outside of mainstream developed markets. Pomegranate favours opportunities with a positive social impact and believes in supporting local entrepreneurs to develop their businesses, by not just providing capital but also active know-how from its large international network of specialists and successful entrepreneurs.
Pomegranate has a fundamental and constant belief that good business and good investment comes from mutual understanding, trust and partnership along with transfer of know-how through personal commitments. This means that our management, the people who invest in us and the businesses in which we invest are drawn together by mutual respect and a strong desire to be successful together.
Pomegranate shares the risk and success with our investors and investees when we successfully develop our investments. Since 2014, we have invested over 100M EUR in the fast-growing consumer-related online space. We are holding minority positions, and work closely with founders and key management as they face the challenges of fast growth, providing advice rooted in global experience and know-how gained from investing in other similar markets. Managing risk and know-how transfer is what we do and have done successfully in other markets.
“Pomegranate has a fundamental and constant belief that good business and good investment comes from mutual understanding, trust and partnership along with transfer of know-how through personal commitments.”
Achieving mutual growth for investors, companies and partners
The Pomegranate team has honed an investment approach over decades successfully investing in emerging markets. The team has invested directly but also together with selected local partners in order to develop high growth companies in the consumer online space in Iran. This is a market that represents a unique investment opportunity and Pomegranate’s founders and senior management are all personally invested in the company, committing to transfer their management experience and knowledge to the local businesses.
Our investors are a combination of entrepreneurs, family offices and financial institutions in Europe. We are a public venture capital company, not an investment fund, traded OTC (over the counter). Our permanent capital model is through participating in the risk and sharing long term returns; we therefore do not charge an annual management fee nor a carry, however have implemented return-related long term investment plans with our portfolio companies as well as in Pomegranate. Our investment platform provides investors with an investment company structure with high corporate standards of compliance (IFRS accounting, for example) in general, sanctions compliance specifically, and a transparent financial model that, unlike so many asset management fee structures, ensures that a minimum amount of capital is taken out of the company to meet the operational expenses.
This approach means that Pomegranate shares the risk and success with our investors and investees when we successfully develop our investments. At Pomegranate we aim to achieve mutual growth for our investors and the companies we invest in. We ourselves will only benefit from investing, as well as developing and helping grow our partners by considering exiting these positions successfully in the very long term.
Pomegranate in numbers
The Iran Tech opportunity
Iran’s consumer internet sector represents a unique emerging market opportunity.
Iran’s young consumer internet sector is driven by demographics. Above 70% of the population is aged under 45 and highly connected, with >80% internet penetration, >140% cellular mobile penetration and >50 million smartphone users. And yet, the value of Iran’s internet companies only accounts for between 1-2% of GDP, way behind other companies with similar dynamics. Online retail penetration is estimated to be around 2% in Iran; in comparable markets like Turkey, that number is 10-15%, therefore offering a unique structural growth aspect. As a result, rapid growth in the online shopping sector offers huge potential for value appreciation and to provide new, world-leading services to Iranian consumers.
The unique demographics of Iran with a growing large, young and well-educated, and central and urbanised population is ideal for Pomegranate’s investments in consumer online sectors such as e-commerce, online classifieds, and online travel to mention a few.
Iran’s current GDP (ca. €400 billion) is comparable to Hong Kong and Denmark and roughly half of Turkey’s GDP.
With more than 85 million people (growing at 1% p.a.), Iran’s population is comparable in size to Turkey and Germany. Iran’s large population is urbanised and highly educated, representing one of the biggest consumer markets that is yet to be fully developed.
Iran has 18% of the world’s proven natural gas reserves (1st in global rankings), 9% of the world’s crude (4th globally) and huge mineral deposits.