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Ozuman e-commerce startup offering online shopping, fintech and food delivery to millions of customers in Uzbekistan, has raised $114 million in funding, becoming the country’s first unicorn with a valuation of $1.16 billion.
Uzbekistan is a fertile ground for startups, due to the presence of people under 30 years of age About 60% of its population of more than 35 million people. Also enjoy the country Literacy rate is close to 100% (according to its government) More than 76% of Internet penetrationAnd Smartphone penetration rate exceeds 75%. In 2020, the Central Asian country had nearly 1,200 startups, 85% of which were at the seed stage. Fintech startups dominated the market with a 30% share, followed by e-commerce startups at 27%, according to Estimates (PDF) By the Asian Development Bank.
However, the country appears to suffer from a startling lack of e-commerce services, which may be among the reasons why the sector represents only 2.2% of Uzbekistan’s total retail market as of December 2022, according to 2022 estimates. a report (PDF) By KPMG. According to Uzum’s co-founder and CEO, Gasur Gumaev, Uzbeks are accustomed to shopping online mainly through social media apps like Instagram, TikTok and Telegram. Customers reached out to sellers in groups on social media platforms, had limited stock keeping units (SKUs) and no logistics to speak of.
“It was a surprise for us to see that smartphone penetration was high and the telecom infrastructure was there, but there was neither e-commerce nor proper fintech,” Dzhumaev told TechCrunch.
Dzhumaev clearly saw the potential for a company in Uzbekistan to do what Amazon has done in so many other countries: offer a cohesive market that promises one-stop logistics and delivery. Uzum began establishing its own logistics, fleet, and established pickup points to offer next-day deliveries. The marketplace launched in October 2022, and today it has over 8 million monthly active users and over 9,000 merchants selling over 600,000 SKUs. In contrast, the country’s largest street market has about 70,000 SKUs on any given day, according to Nikolai Seleznev, chief strategy and business development officer at Uzum. In its first full year of operations, the startup recorded a gross merchandise value (GMV) of $150 million, and expects its run GMV to reach at least $300 million this year.
Soon after its success in the market, Uzum ventured into the fintech space with its buy now, pay later (BNPL) product. About 45% to 50% of e-commerce transactions are done through the BNPL solution, Jumaev said. Uzum has also ventured into food delivery and set up a digital bank to fuel its growth.
“Since we attract customers via e-commerce, we retain them in highly transactional businesses like everyday banking, which are 100% digital. We monetize them through our lending or credit products, which “It is 100% Sharia compliant, which is also very attractive to at least 85% of the population in Uzbekistan.”
The A round, consisting of US$52 million in equity and the remaining US$62 million in debt, was led by FinSight Ventures, and saw participation from Xanara Investment Management and Uzum’s senior management. Uzum has cut less than 5% to investors participating in its Series A round, the startup’s first external funding. The startup also plans to raise about $200 million in a second funding round this year from investors in the Middle East, the United Kingdom, and the United States.
Uzum plans to use two-thirds of the new funding for its fintech business and one-third for its e-commerce arm. There are plans to launch new unsecured lending products to individuals as well as small and medium-sized enterprises, and to invest in its IT and logistics infrastructure.
“We want to expand products, strengthen our e-commerce infrastructure, and finance our fintech,” Jumaev said.
The startup intends to expand its total volume by 150% to 200%, grow its credit portfolio at least twice, and increase the total volume of payments traded through its ecosystem, Seleznev said.
By the end of this year, Uzum plans to consolidate all of its businesses into two super apps: one for its consumer-focused offerings, and one for its business-focused products. It also aims to launch the country’s largest e-commerce logistics park in June, which is scheduled to span 112,000 square meters initially, then expand to more than 500,000 square meters in the next few years.
Jumayev said that a few companies globally operate similarly to Ozum, and mentioned Nubank in Latin America and Kaspi.kz in Kazakhstan. However, he sees no competition in Uzbekistan, where Uzum has the advantage of having different margins across products, and can achieve higher margins by combining e-commerce and fintech services.
“We have witnessed the success of Kaspi.kz in creating a super app in neighboring Kazakhstan, and we are confident that Uzum, which has the necessary talent, resources and products, will replicate this success to become Uzbekistan’s national technology leader,” he said. Alexey Garyunov, managing partner of FinSight Ventures, in a prepared statement.
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