Page 14 - Uzbek Outlook 2024

5.4 Tech
Uzbekistan’s local startup scene is still embryonic. There were only around 1,000 startup projects (with or without a legal entity) in the country in 2023, according to IFC research.
Among the factors hampering startup development is the scarcity of startup entrepreneurial skills and human resources.
But due to the country’s impressive progress in IT education – as exemplified by the success of the state programme “One Million Uzbek Coders” – quality products are, nevertheless, starting to emerge on the market.
“When visiting one of the local IT companies, Udev, I was pleasantly surprised by their products. Their Uber-style logistics solution, their advanced video streaming software, their online government systems including e-document management system were all competitive from an international perspective,” says Stephen Lin, a US citizen with an IT vendor management background who founded the Swift Launch incubation programme in Uzbekistan in 2023.
“There’s a bunch of technology assets that are sitting unused here. But Uzbeks rarely know how to sell them internationally and create globally-oriented startups,” he notes.
Billz, a retail tech solution provider, Iman, a halal finance solution, and TASS Vision, a developer of in-store analytics tools, are some of the startup products just starting to sell abroad. The latter two have been backed by various venture funds, including foreign ones, but they still have 95% of their customers located in Uzbekistan.
Meanwhile, EndCode.io, a mobile app development startup founded last year by relocated Russian techie Artem Panferov, has more than half of its customers in Western countries and no more than 15% in Uzbekistan.
Uzbek venture capital firms are few. They include: Aloqa Ventures, launched in 2021 by a major local bank; Semurg VC, backed by a local high-net-worth individual and a major local insurance company; UC Ventures, which is affiliated with e-payment leader Uzcard; and a state-owned fund called UzVC. These funds invest only small amounts at the pre-seed and seed stages.
Some digital projects are backed by wealthy Uzbeks – as has been the case with Uzum, a giant e-commerce and fintech ecosystem launched last year with involvement from Russian industry veterans. However, such cases are still rare, and may involve political complications.
A handful of foreign investors have been seen thus far on the Uzbek startup scene. UK-based Sturgeon Capital, the most active of them, is a $300mn private equity/VC fund targeting “frontier markets” – including Central Asia, Bangladesh and Pakistan – where they see a “$300bn revenue opportunity.” Sturgeon has backed six startups born or operating in Uzbekistan since 2019. One of them is Zood.biz, a Switzerland-based digital lending and logistic solution provider that serves 30,000 merchants and 10mn customers in
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