In recent years, the autonomous region of Iraqi Kurdistan has generated headlines for its relative stability and booming oil-based economy. But so far, the economic boom has not been accompanied by the cultivation of a robust entrepreneurial ecosystem. Amed Latif Omar and Banu Ibrahim Ali, the two Iraqi-Kurdish cofounders of ifrosh, are looking to change that.

ifrosh is one of the first startups in Iraqi Kurdistan and, like many entrepreneurial ventures, it was inspired by a need in the community.

Omar and Ali are from Sulamaini, one of the economic centers of Iraq’s Kurdish region. Shopping in the city is largely done in traditional markets that fulfill most, but not all, consumer needs. “I needed to buy and sell things I couldn’t find in the bazaar,” says Omar, ifrosh’s CEO.

To help fill this gap, Omar and Ali came up with the idea for an online, community-based marketplace to connect merchants and consumers. The name, ifrosh, comes from the Kurdish word ‘to sell’, and is currently running a test period on the American University of Iraq, Sulamaini (AUIS) campus before launching in beta at the end of the summer.

A community based, online marketplace

Merchants can register to sell their wares on the site where consumers can search for products either by name, product ID number, or through vendors they already trust.

To build this trust, the site allows consumers to rate and write reviews about their experiences with specific sellers. The site also offers a social media-type ‘follow’ option for consumers to stay connected with their favorite vendors.

Omar and Ali, along with a team of five other designers and developers, have designed the site to facilitate easy communication between sellers and buyers, one of the most important foundations for ifrosh’s model, adds Ali, the startup’s COO. There is a culture in Iraqi Kurdistan against bargaining over prices face to face, according to Latif. Moving this process online will make it easier for consumers to negotiate for good prices.

In ifrosh’s model, actual financial transactions between buyers and sellers do not take place online. The website is a space for merchants and consumers to connect and negotiate a price. They then agree on a place to meet in person to complete the transaction.

In the future, Omar and Ali are considering adding online delivery and payment if there’s the demand from ifrosh’s users.

Revenue stream

For now, ifrosh’s revenue stream is based on a premium model. The site offers eight categories in which merchants post their products. Three of these, electronics, cars, and property, are premium categories, meaning sellers have to pay a small fee to post items for sale. Omar and Ali chose these categories to be premium because they are the most heavily trafficked on e-commerce sites.

In order for sellers to load money onto their accounts to post in the premium categories, ifrosh uses a voucher card system.

The voucher card system works similarly to the system for pay-as-you-go mobile phone cards. ifrosh works with a supplier to produce the cards that can be sold in shops with a small markup for the shop owners. People who buy them can redeem their credit on ifrosh and begin posting items for sale in the premium categories.

Like much of the Middle East, very few people use credit or debit cards in Iraqi Kurdistan. The voucher system is ifrosh's attempt to circumvent this issue, a thorn in the side for many regional ecommerce startups.

Omar and Ali are planning on adding click ads to the site as well for an additional source of revenue. They’re wary, though, of the ads’ potential to detract from their users’ experience.

Also, in the future, they are planning on adding a business account option, wherein sellers will be able to pay an annual fee to open their own shops on the site. Business account holders will be able to post an unlimited number of items for sale in any category, bypassing the pay-to-post premium model.

Trial period

Before fully launching, ifrosh is currently running a two-month trial period with students from the American University of Iraq, Sulaimani (AUIS). During this period, the books category of the site is open for students to test out ifrosh’s features around selling and buying textbooks.

Textbooks are very expensive in Sulaimani, according to Ali. Providing a platform for students to sell and buy textbooks amongst each other is helping people save money and providing a needed service, she adds.

Omar and Ali are collecting feedback during this trial period in order to enhance user experience before they open the rest of the categories to the public at the end of the summer. They plan on running a beta version of the site for six to seven months to fine tune its features.

Within a year, Omar and Ali are planning to expand to Erbil, the capital of Iraqi Kurdistan, and Dohuk, another important economic center. Their ambitions, however, are not limited just to the Kurdish region. “We want to become a model for entrepreneurship in all of Iraq,” Omar says.