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


Uzum, an e-commerce startup providing on-line buying, fintech and meals deliveries to thousands and thousands of consumers 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 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 (in accordance with 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%, in accordance with estimates (PDF) by the Asian Improvement Financial institution.

Nonetheless, the nation appears to have a stunning lack of e-commerce providers, 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. Based on Uzum’s co-founder and CEO, Djasur Djumaev, Uzbeks used to primarily store on-line by social media apps resembling Instagram, TikTok and Telegram. Prospects related 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 instructed TechCrunch.

Djumaev clearly noticed the potential for an organization to do in Uzbekistan what Amazon has performed in a whole lot of different international locations: supply a cohesive market that guarantees end-to-end logistics and supply. Uzum began by establishing its logistics, a fleet, and established pickup factors to supply next-day deliveries. {The marketplace} was launched in October 2022, and in the present day, it has greater than 8 million month-to-month energetic customers and over 9,000 retailers promoting 600,000+ SKUs. In distinction, the most important avenue bazaar within the nation has about 70,000 SKUs on any given day, in accordance with Nikolai Seleznev, chief technique and enterprise growth 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 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 performed by way of the BNPL answer, Djumaev mentioned. Uzum has additionally entered the meals supply enterprise and arrange a digital financial institution to bolster its progress.

“As a result of we appeal to clients on e-commerce, we retain them on high-transaction companies like each day banking, which is 100% digital. We monetize them on our lending or credit score merchandise, that are 100% Sharia-compliant, which can also be very interesting to at the least 85% of the inhabitants in Uzbekistan,” Seleznev instructed TechCrunch.

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 taking part 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 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 least two occasions, and improve 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 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 firms 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 completely different margins throughout merchandise, and may make increased margins by combining its e-commerce and fintech providers.

“We 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, sources 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.

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