Uzum, an e-commerce startup providing on-line buying, fintech and meals supply to tens of millions of shoppers in Uzbekistan, has raised $114 million in funding, changing into the nation’s first unicorn with a valuation of $1.16 billion.
Uzbekistan is fertile floor for startups, given that folks below 30 make up about 60% of its inhabitants of greater than 35 million. The nation additionally has a literacy price of almost 100% (in response to its authorities), over 76% web penetration, and over 75% smartphone penetration price. 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%, in response to estimates (PDF) from the Asian Improvement Financial institution.
Nevertheless, the nation seems to endure from a startling lack of e-commerce providers, which can be among the many explanation why the sector represents solely 2.2% of Uzbekistan’s complete retail market as of December 2022, in response to a report (PDF) by KPMG. Based on Uzum’s co-founder and CEO, Gasur Gumaev, Uzbeks are accustomed to buying on-line primarily by means of social media apps like Instagram, TikTok and Telegram. Prospects reached out to sellers in teams on social media platforms, had restricted inventory maintaining models (SKUs) and no logistics to talk of.
“It was a shock for us to see that smartphone penetration was excessive and the telecom infrastructure was there, however there was neither e-commerce nor correct fintech,” Dzhumaev advised TechCrunch.
Dzhumaev clearly noticed the potential for a corporation in Uzbekistan to do what Amazon has executed in so many different international locations: provide a cohesive market that guarantees one-stop logistics and supply. Uzum started establishing its personal logistics, fleet, and established pickup factors to supply next-day deliveries. {The marketplace} launched in October 2022, and immediately it has over 8 million month-to-month energetic customers and over 9,000 retailers promoting over 600,000 SKUs. In distinction, the nation’s largest road market has about 70,000 SKUs on any given day, in response to Nikolai Seleznev, chief technique and enterprise growth officer at Uzum. In its first full yr of operations, the startup recorded a gross merchandise worth (GMV) of $150 million, and expects its run GMV to achieve at the very least $300 million this yr.
Quickly after its success available in the market, Uzum ventured into the fintech house with its purchase now, pay later (BNPL) product. About 45% to 50% of e-commerce transactions are executed by means of the BNPL answer, Gumayev stated. Uzum has additionally entered the meals supply house and arrange a digital financial institution to gasoline its progress.
“Since we entice clients through e-commerce, we retain them in extremely transactional companies like on a regular basis banking, that are 100% digital. We monetize them by means of our lending or credit score merchandise, which “It’s 100% Sharia compliant, which can be very engaging to at the very least 85% of the inhabitants in Uzbekistan.”
The A spherical, consisting of US$52 million in fairness and the remaining US$62 million in debt, was led by FinSight Ventures, and noticed participation from Xanara Funding Administration and Uzum’s senior administration. Uzum has reduce lower than 5% to traders taking part in its Sequence A spherical, the startup’s first exterior funding. The startup additionally plans to boost about $200 million in a second funding spherical this yr from traders within the Center East, the UK, and america.
Uzum plans to make use of two-thirds of the brand new funding for its fintech enterprise and one-third for its e-commerce arm. There are plans to launch new unsecured lending merchandise to people in addition to small and medium-sized enterprises, and to put money into its IT and logistics infrastructure.
“We need to develop merchandise, strengthen our e-commerce infrastructure, and finance our fintech,” Jumaev stated.
The startup intends to develop its complete quantity by 150% to 200%, develop its credit score portfolio at the very least twice, and enhance the overall quantity of funds traded by means of its ecosystem, Seleznev stated.
By the top of this yr, Uzum plans to consolidate all of its companies into two tremendous apps: one for its consumer-focused choices, and one for its business-focused merchandise. It additionally goals to launch the nation’s largest e-commerce logistics park in June, which is scheduled to span 112,000 sq. meters initially, then develop to greater than 500,000 sq. meters within the subsequent few years.
Jumayev stated that a couple of firms globally function equally to Ozum, and talked about Nubank in Latin America and Kaspi.kz in Kazakhstan. Nevertheless, he sees no competitors in Uzbekistan, the place Uzum has the benefit of getting completely different margins throughout merchandise, and may obtain increased margins by combining e-commerce and fintech providers.
“We’ve witnessed the success of Kaspi.kz in creating a brilliant app in neighboring Kazakhstan, and we’re assured that Uzum, which has the required expertise, assets and merchandise, will replicate this success to develop into Uzbekistan’s nationwide know-how chief,” he stated. Alexey Garyunov, managing accomplice of FinSight Ventures, in a ready assertion.