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HomeLatest NewsTechnologyMeet Uzbekistan's first unicorn: e-commerce startup Uzum | Prime Time News24

Meet Uzbekistan's first unicorn: e-commerce startup Uzum | Prime Time News24


Uzum, an e-commerce startup providing on-line buying, fintech and meals deliveries to hundreds of 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 practically 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.

Nevertheless, the nation appears to have a stunning 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 line with Uzum’s co-founder and CEO, Djasur Djumaev, Uzbeks used to primarily store on-line by social media apps akin to Instagram, TikTok and Telegram. Prospects linked with sellers in teams on social platforms, who had restricted stock-keeping models (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 Prime Time News24.

Djumaev clearly noticed the potential for an organization to do in Uzbekistan what Amazon has carried out in quite a lot of different international locations: provide 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 at this time, it has greater than 8 million month-to-month lively 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 yr of operations, the startup recorded gross merchandise worth (GMV) of $150 million, and expects run-rate GMV to achieve at the very least $300 million this yr.

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 carried out by way of the BNPL resolution, Djumaev stated. 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 Prime Time News24.

The Collection 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 traders collaborating within the Collection A spherical, which is the startup’s first exterior funding. The startup additionally plans to lift about $200 million in a Collection B spherical this yr from traders within the Center East, U.Okay. and the U.S.

Uzum plans to make use of two-thirds of the recent 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 put money into its personal IT and logistics infrastructure.

“We wish to increase the merchandise, improve the infrastructure of our e-commerce, and fund our fintech,” Djumaev stated.

Seleznev stated the startup intends to increase its GMV by 150% to 200%, develop its credit score portfolio at the very least two instances, and enhance the whole fee quantity circulated by its ecosystem.

By the tip of this yr, 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 complicated 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 stated just a few firms globally function equally to Uzum, and named Latin America’s Nubank and Kazakhstan’s Kaspi.kz. Nevertheless, he doesn’t see any competitors in Uzbekistan, as Uzum has the benefit of having fun with completely different margins throughout merchandise, and may make increased margins by combining its e-commerce and fintech companies.

“We witnessed the success of Kaspi.kz in creating an excellent app in neighboring Kazakhstan, and we’re assured that Uzum, which has the required expertise, sources and merchandise, will repeat this success to turn into a nationwide tech chief in Uzbekistan,” stated Alexey Garyunov, managing companion of FinSight Ventures, in a ready assertion.

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