Uzum, an e-commerce startup providing on-line purchasing, fintech and meals deliveries to thousands and thousands of shoppers in Uzbekistan, has raised $114 million in funding, turning into the nation’s first unicorn with a valuation of $1.16 billion.
Uzbekistan is fertile floor for startups, given the truth that folks aged under 30 represent about 60% of its inhabitants of over 35 million. The nation additionally enjoys a close to 100% literacy fee (based on its authorities), greater than 76% web penetration, and over 75% smartphone penetration fee. In 2020, the Central Asian nation had almost 1,200 startups, 85% of which had been on the seed stage. Fintech startups dominated the market with a 30% share, adopted by e-commerce startups at 27%, based on estimates (PDF) by the Asian Improvement Financial institution.
Nonetheless, the nation appears to have a surprising lack of e-commerce companies, which can be among the many the reason why the sector accounted for under 2.2% of Uzbekistan’s whole retail market as of December 2022, per a report (PDF) by KPMG. In keeping with Uzum’s co-founder and CEO, Djasur Djumaev, Uzbeks used to primarily store on-line by way of social media apps reminiscent of Instagram, TikTok and Telegram. Clients related with sellers in teams on social platforms, who had restricted stock-keeping items (SKUs) and no logistics to talk of.
“It was a shock for us to see that the penetration of smartphones was excessive and telecom infrastructure was in place, however there was no e-commerce, no correct fintech,” Djumaev informed TechCrunch.
Djumaev clearly noticed the potential for a corporation to do in Uzbekistan what Amazon has finished in a whole lot of different international locations: supply a cohesive market that guarantees end-to-end logistics and supply. Uzum began by organising its logistics, a fleet, and established pickup factors to supply next-day deliveries. {The marketplace} was launched in October 2022, and right now, it has greater than 8 million month-to-month energetic customers and over 9,000 retailers promoting 600,000+ SKUs. In distinction, the largest road bazaar within the nation has about 70,000 SKUs on any given day, based on Nikolay Seleznev, chief technique and enterprise improvement officer at Uzum. In its first full 12 months of operations, the startup recorded gross merchandise worth (GMV) of $150 million, and expects run-rate GMV to succeed in at the very least $300 million this 12 months.
Shortly after its success with {the marketplace}, Uzum forayed into fintech with a buy-now-pay-later (BNPL) product. About 45% to 50% of its e-commerce transactions are finished by way of the BNPL resolution, Djumaev mentioned. Uzum has additionally entered the meals supply enterprise and arrange a digital financial institution to bolster its development.
“As a result of we entice clients on e-commerce, we retain them on high-transaction companies like every day banking, which is 100% digital. We monetize them on our lending or credit score merchandise, that are 100% Sharia-compliant, which can be very interesting to at the very least 85% of the inhabitants in Uzbekistan,” Seleznev informed TechCrunch.
The Sequence A spherical, comprising $52 million in fairness and the remaining $62 million in debt, was led by FinSight Ventures, and noticed participation from Xanara Funding Administration and Uzum’s senior administration. Uzum has diluted lower than 5% to buyers collaborating within the Sequence A spherical, which is the startup’s first exterior funding. The startup additionally plans to boost about $200 million in a Sequence B spherical this 12 months from buyers within the Center East, U.Okay. and the U.S.
Uzum plans to make use of two-thirds of the contemporary funding for its fintech enterprise and one-third for the e-commerce arm. There are plans to launch new merchandise for unsecured lending to people in addition to small and medium-sized enterprises, and spend money on its personal IT and logistics infrastructure.
“We need to develop the merchandise, improve the infrastructure of our e-commerce, and fund our fintech,” Djumaev mentioned.
Seleznev mentioned the startup intends to develop its GMV by 150% to 200%, develop its credit score portfolio at the very least two occasions, and improve the overall cost quantity circulated by way of its ecosystem.
By the tip of this 12 months, Uzum plans to mix all its companies into two tremendous apps: one for its consumer-focused choices, and one other for its business-focused merchandise. It additionally goals to launch the nation’s “largest” logistics advanced for e-commerce in June, deliberate to span 112,000 sq. meters initially, and expanded to over 500,000 sq. meters within the subsequent few years.
Djumaev mentioned a number of corporations globally function equally to Uzum, and named Latin America’s Nubank and Kazakhstan’s Kaspi.kz. Nonetheless, he doesn’t see any competitors in Uzbekistan, as Uzum has the benefit of having fun with totally different margins throughout merchandise, and may make greater margins by combining its e-commerce and fintech companies.
“We witnessed the success of Kaspi.kz in creating a brilliant app in neighboring Kazakhstan, and we’re assured that Uzum, which has the mandatory expertise, assets and merchandise, will repeat this success to turn out to be a nationwide tech chief in Uzbekistan,” mentioned Alexey Garyunov, managing accomplice of FinSight Ventures, in a ready assertion.
