Meet Uzbekistan’s first unicorn: e-commerce startup Uzum

Uzum, an e-commerce startup featuring on line procuring, fintech and foods deliveries to millions of consumers in Uzbekistan, has raised $114 million in funding, getting the country’s initial unicorn with a valuation of $1.16 billion.

Uzbekistan is fertile ground for startups, supplied the point that folks aged beneath 30 represent about 60% of its population of above 35 million. The country also enjoys a close to 100% literacy price (in accordance to its governing administration), much more than 76% internet penetration, and in excess of 75% smartphone penetration level. In 2020, the Central Asian country experienced just about 1,200 startups, 85% of which had been at the seed phase. Fintech startups dominated the marketplace with a 30% share, adopted by e-commerce startups at 27%, in accordance to estimates (PDF) by the Asian Enhancement Bank.

However, the region appears to be to have a shocking absence of e-commerce solutions, which might be amongst the motives why the sector accounted for only 2.2% of Uzbekistan’s total retail current market as of December 2022, for each a report (PDF) by KPMG. In accordance to Uzum’s co-founder and CEO, Djasur Djumaev, Uzbeks used to mainly store on the web through social media applications this sort of as Instagram, TikTok and Telegram. Prospects related with sellers in groups on social platforms, who had limited stock-retaining units (SKUs) and no logistics to communicate of.

“It was a shock for us to see that the penetration of smartphones was higher and telecom infrastructure was in place, but there was no e-commerce, no good fintech,” Djumaev informed TechCrunch.

Djumaev plainly observed the potential for a enterprise to do in Uzbekistan what Amazon has carried out in a lot of other countries: present a cohesive marketplace that claims conclude-to-conclusion logistics and shipping. Uzum begun by placing up its logistics, a fleet, and recognized pickup factors to give following-day deliveries. The marketplace was launched in October 2022, and right now, it has much more than 8 million month to month active users and around 9,000 retailers selling 600,000+ SKUs. In contrast, the major avenue bazaar in the state has about 70,000 SKUs on any supplied working day, according to Nikolay Seleznev, main approach and business development officer at Uzum. In its 1st entire yr of operations, the startup recorded gross goods value (GMV) of $150 million and expects run-level GMV to attain at minimum $300 million this yr.

Soon right after its good results with the marketplace, Uzum forayed into fintech with a invest in now, fork out later on (BNPL) merchandise. About 45% to 50% of its e-commerce transactions are performed by way of the BNPL alternative, Djumaev claimed. Uzum has also entered the foodstuff supply business and established up a digital financial institution to bolster its progress.

“Because we entice buyers on e-commerce, we keep them on large-transaction organizations like day-to-day banking, which is 100% electronic. We monetize them on our lending or credit rating merchandise, which are 100% Sharia-compliant, which is also extremely desirable to at least 85% of the population in Uzbekistan,” Seleznev told TechCrunch.

The Sequence A spherical, comprising $52 million in fairness and the remaining $62 million in credit card debt, was led by FinSight Ventures and saw participation from Xanara Investment Management and Uzum’s senior management. Uzum has diluted fewer than 5% to buyers participating in the Collection A spherical, which is the startup’s very first external funding. The startup also plans to elevate about $200 million in a Sequence B spherical this year from investors in the Middle East, U.K. and the U.S.

Uzum ideas to use two-thirds of the clean funding for its fintech company and one-third for the e-commerce arm. There are programs to launch new merchandise for unsecured lending to people today as nicely as modest- and medium-sized enterprises and devote in its own IT and logistics infrastructure.

“We want to expand the solutions, boost the infrastructure of our e-commerce, and fund our fintech,” Djumaev reported.

Seleznev mentioned the startup intends to expand its GMV by 150% to 200%, grow its credit rating portfolio at the very least two periods, and boost the complete payment volume circulated by its ecosystem.

By the finish of this 12 months, Uzum plans to incorporate all its firms into two tremendous applications: a person for its client-concentrated offerings and another for its small business-focused products. It also aims to start the country’s “largest” logistics advanced for e-commerce in June, prepared to span 112,000 square meters initially, and expanded to over 500,000 sq. meters in the next handful of many years.

Djumaev mentioned a few organizations globally function likewise to Uzum and named Latin America’s Nubank and Kazakhstan’s Kaspi.kz. Even so, he doesn’t see any competitiveness in Uzbekistan, as Uzum has the edge of experiencing distinctive margins throughout solutions and can make bigger margins by combining its e-commerce and fintech providers.

“We witnessed the success of Kaspi.kz in creating a super app in neighboring Kazakhstan, and we are self-confident that Uzum, which has the required expertise, sources and products and solutions, will repeat this accomplishment to turn into a countrywide tech leader in Uzbekistan,” stated Alexey Garyunov, running spouse of FinSight Ventures, in a well prepared assertion.

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