Uzum Becomes First Uzbek Tech Start-Up to Achieve Unicorn Status

In a boost to Uzbekistan’s start-up ecosystem, Uzum, a leading digital services ecosystem in Uzbekistan, has secured $114 million in funding through a combination of a Series A funding round and debt financing.

With this, Uzum became the first tech company in the Central Asian nation to achieve unicorn status with a post-money valuation of over $1 billion. Uzum plans to use the funds to develop the country’s IT and logistics infrastructure, as well as to fund its own BNPL-service.

Uzum plans to raise additional financing of approximately $200 million in a Series B funding round from investors in the Middle East, the UK and the US in 2024.

In its report published in 2023, the Asian Development Bank (ADB) said that Uzbekistan’s start-up ecosystem is still very much in its infancy as there were less than 1,200 start-ups in 2020 with most at either the pre-seed or seed stages.

According to global consultancy firm KPMG, Uzbekistan is home to the fastest-growing e-commerce market in Central Asia, with the potential to grow up to sevenfold by the end of 2027. At the same time, the country’s GDP grew by 6% in 2023, and Uzbekistan plans to double this figure in the next few years.

The country’s economy has the potential for growth and rapid digitalisation thanks to several factors, including a high rate of Internet penetration, a young population, as well as a currently low penetration rate of banking and financial services.

Latest Funding

Uzum secured $52 million in equity through a Series A funding round consisting wholly of primary investments. The round was led by the global venture capital firm FinSight Ventures (whose portfolio companies have included Intercom, ThoughtSpot, Automation Anywhere, Toss, GupShup, Razorpay, Bumble, Rappi, Carta and others), joined by Xanara Investment Management, a multifamily office in the UAE, and Uzum’s senior management team.

The company separately raised an additional $62 million in debt financing. Investors taking part in the Series A funding round will receive stakes of less than 5% in the company.

Given Uzum’s strong performance in 2023 – its first full year of operations – and the ecosystem’s enormous potential, the shareholders decided to not substantially dilute their ownership stakes during the funding round.

Combining e-commerce, fintech and banking services for individuals and small and medium-sized enterprises, the Uzum digital ecosystem includes a marketplace, an express delivery service, traditional and digital banks, a BNPL service, an automotive marketplace and an app for entrepreneurs.

All of the ecosystem’s components are now being integrated into two super-apps: Uzum for individuals, and Uzum Business for legal entities. By the end of 2023, the Uzum ecosystem had 10 million monthly average users and net profit just shy of $100 million. Meanwhile, Uzum’s retail banking and fintech businesses were among the leaders in the country in terms of profit, and its e-commerce business was the largest online platform in Uzbekistan by the number of users and number of orders, with turnover of around $150 million.

Alexey Garyunov, Managing Partner at FinSight Ventures, said that their focus is on FinTech, B2B SaaS and the e-commerce markets in the US and India, as well as investing in super-apps in emerging markets.

“We have witnessed the success of Kaspi.kz in creating a super-app in Kazakhstan, Rappi in Latin America, and Toss in South Korea, and we are confident that Uzum, which has the necessary talent, resources and products, will repeat this success to become the national tech leader in Uzbekistan,” he added.

Uzum’s Founder and CEO Djasur Djumaev said that digital services in Uzbekistan have been incredibly popular and they have seen growth rates of the markets that they worked in as well as in their own experience.

Djumaev said that in little over a year, Uzum has developed an ecosystem whose services are used by more than 10 million people in Uzbekistan every month.

“Last year, we earned nearly $100 million in net profit, and we intend to increase this figure this year, partly by integrating services within the Uzum ecosystem. We also plan to add new business streams and services for business and private users to the ecosystem this year,” he added.