Iraq, often dubbed one of the last major untapped economies in the Middle East, is poised for a digital revolution. Despite a large, young, and increasingly connected population, its startup ecosystem remains in its nascent stages, fragmented, and largely informal. Enter EQIQ, an innovative venture capital (VC) fund operating as a venture studio hybrid, aggressively co-building companies from the ground up to catalyze Iraq’s burgeoning tech scene.
Unlike traditional VC funds that primarily offer passive investment, EQIQ is taking a deeply hands-on approach. The firm is not just funding; it’s actively involved in nurturing startups from inception, aiming to bridge critical gaps in Iraq’s underdeveloped digital infrastructure.
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Youthful Demographics Meet Digital Ambition
Mohamed Al-Hakim, a serial entrepreneur and EQIQ’s co-founder, sees immense potential in Iraq’s demographics. “Iraq has significant untapped potential underpinned by a young, vibrant, and tech-savvy population that is hungry to achieve,” Al-Hakim stated. He acknowledges that while opportunities abound, market inefficiencies often prevent stakeholders from connecting effectively. EQIQ’s core mission is to close this gap by backing and collaboratively building startups capable of solving real-world problems and delivering high-quality digital experiences to millions of Iraqis.
“The country is underserved in many sectors, and capital has been scarce as investors have been cautious to enter a market they know little about. We founded EQIQ as a platform to bridge the gap between capital and opportunity,” Al-Hakim added, highlighting the dual challenge of market need and investor apprehension.
Said Rahmani, EQIQ’s founding partner and a global serial entrepreneur, echoes this optimism, pointing to Iraq’s improving stability and robust fundamentals. “We see Iraq’s strong fundamentals, rapid growth, and stabilizing outlook as a signal that the country is primed for innovation,” Rahmani commented. “The emergence of relentless entrepreneurs who are working hard to build great businesses makes it only a matter of time. Our goal is to help founders build meaningful solutions and resilient tech companies that will serve as cornerstones of the regional economy for decades to come.”
Strategic Investment & Ecosystem Building
Domiciled in Abu Dhabi Global Markets (ADGM), EQIQ strategically targets both greenfield (new ventures) and brownfield (existing but underdeveloped) opportunities. Their primary focus sectors in Iraq include e-commerce, logistics, and fintech. A unique aspect of EQIQ’s strategy is allocating 80% of its capital towards building a cohesive network of ventures designed to complement one another. This approach fosters synergies, strengthening the entire ecosystem as these companies grow and scale together.
EQIQ successfully completed its first close in January 2023, raising US$15 million from a consortium of local and regional investors. To date, US$8.5 million has been deployed across five key investments:
- Wayl: A promising payments startup.
- InstaBank: An upcoming digital bank poised to transform financial services.
- Fedshi: A social commerce startup tapping into the power of community.
- Boxy: A logistics application streamlining deliveries.
- Corrsy: An edtech company addressing educational needs.
Notably, three of these ventures are being co-built by EQIQ directly with founding teams from its own network, demonstrating their hands-on “venture studio” model.
Buoyed by positive early results, EQIQ now plans to double the size of its fund to US$30 million to deepen its investments in Iraq’s digital economy, signaling a strong commitment to backing or building more startups. The firm aims to close this fundraise by the end of this year. “The first US$15 million was a market test,” Al-Hakim told The National in June. “We saw very positive results, so we are expanding the fund’s size to explore even greater opportunities in Iraq.” He confirmed ongoing discussions with both local and foreign investors.
Al-Hakim expressed confidence in the current climate, stating, “Today is the best time in the 11 years I’ve spent in Iraq in terms of security and political stability, which has positively impacted the entrepreneurship environment.” He aims to deliver a tenfold increase in financial returns to investors within the next five years.
Iraq’s Thriving Startup Ecosystem: Growth and Key Players
While still nascent compared to regional counterparts like Jordan or the UAE, Iraq’s startup ecosystem is experiencing steady and encouraging growth. In StartupBlink’s 2025 Global Startup Ecosystem Index, Iraq ranked 118th globally, climbing one spot from the previous year, and secured the 11th position in the Middle East. Its capital, Baghdad, entered the top 1,000 startup cities worldwide, recording an impressive annual growth of 64.3%.
Currently, e-commerce, fintech, and delivery and logistics are the most active startup sectors. Notable trailblazers include:
- Lezzoo: A popular delivery super app.
- Miswag: A leading e-commerce platform.
- Zain Cash: A prominent mobile wallet.
- NEO Pay Iraq: A leading payment service provider.
Drivers of Growth: Youth, Diaspora, and Digital Leapfrog
Several factors are fueling this burgeoning growth. Iraq boasts a young and exceptionally tech-savvy population, many of whom view entrepreneurship as an attractive, and often necessary, alternative to increasingly scarce traditional government jobs. The country is also benefiting from a digital leapfrog, with rapidly increasing mobile phone and internet penetration, bypassing older fixed-line infrastructures.
The vibrant Iraqi diaspora plays a crucial role as well. Many founders and investors from the large Iraqi community living abroad are returning, bringing invaluable ideas, experience, capital, and international connections that enrich the local ecosystem. Furthermore, local hubs and VCs like The Station, Five One Invest, and Netaj actively foster the ecosystem by offering coding bootcamps, mentorship, and dedicated startup programs. New initiatives are continually emerging, such as Netaj’s recently announced Nawat venture studio for Iraqi startups, which aims to support up to 40 startups annually through a hands-on model combining mentorship, product development, and investment.
Persistent Challenges: Roadblocks to Rapid Expansion
Despite these promising signs, Iraq’s startups continue to face significant hurdles. Bureaucracy, pervasive corruption, outdated laws, and foreign ownership restrictions pose substantial obstacles to growth and investment. Moreover, fundamental infrastructure gaps—including frequent electricity cuts, underdeveloped payment gateways, and limited banking services—make it challenging for startups to operate efficiently and scale effectively.
A critical impediment is the lack of reliable market data, which complicates decision-making for both founders and investors. This scarcity of actionable insights limits investment flows and ultimately hinders sector growth and job creation.
A 2023 study by Five One Invest highlighted that Iraqi startup founders primarily struggle with limited access to capital, a lack of practical investment knowledge, and closed investor networks. Investors, on the other hand, cite regulatory challenges and a dearth of reliable data from startups as key concerns, making them cautious. They also noted a scarcity of startups that consistently meet their investment criteria.
Despite these challenges, the determined efforts of firms like EQIQ and the inherent dynamism of Iraq’s young population suggest a future ripe with potential for digital transformation.
