Uzum is Uzbekistan’s first ever tech unicorn and leads the pack as the country is being transformed into Central Asia’s tech hub.

Uzum claimed the “billion dollar” crown after raising $150mn in funding on a valuation of $1.16bn in March 2024, and today is head and shoulders ahead of the rest of the country’s start-ups.

The leading digital platform integrating e-commerce and increasingly fintech services, Uzum is currently preparing for another capital injection ahead of its eventual ambition to IPO, probably on the NYSE.

In the meantime, Djasur Djumaev, CEO and founder of the Uzum ecosystem, told bne IntelliNews in an exclusive interview during the Tashkent International Investment Forum (TIIF) in June that he has his work cut out for him simply fill out the corners of his flourishing business.

“We already have investors from the US. We haven't announced it yet, but we have a big venture firm that invested in us. We’ll be announcing it very soon. We just want to wait until the investor forum happens,” Djumaev told bne IntelliNews.

The Tashkent-based company’s last round of funding was a mix of equity and debt, including a recent tactical round designed “to take less money, grow a bit and take a larger premium,” according to Djumaev.

Uzum is one of the big winners from the string of liberal reforms put in place since Uzbek President Shavkat Mirziyoyev took office in 2016 – most importantly the currency exchange liberalisations and the start of the digitalisation of the economy. The foreign exchange restrictions were imposed by the previous, and only, president since Uzbekistan’s independence in 1991, Islam Karimov, and were a major impediment to business and trade. One of the first things Mirziyoyev did was to nix them.

Founded after the first wave of economic reforms were completed in 2017, Uzum has grown rapidly since, with an e-commerce offering that is increasingly integrating financial services to its customer base and becoming a major source of revenue.

“Our first step was e-commerce. We created this high-frequency transaction base. Now we’re monetising our customers through fintech solutions,” Djumaev explained.

Fund raising

The Uzbekistan tech sector is coming of age. The government has highlighted it as a key sector and thrown a great deal of resources into building up Uzbekistan as an software outsourcing hub. The state has launched its “million coders” drive and opened dozens of universities to train a generation of engineers and established the IT Park to act as a hub. In his plenary session speech at the Tashkent International Investment Forum (TIIF), Mirziyoyev boasted that tech exports will pass the $1bn mark this year.

“It’s because we’re double-landlocked,” says Djumaev. “Exporting digital products is an obvious opportunity.”

Uzum’s life has also been made easier by the $6.5bn IPO of Kaspi.kz in October 2020 from next-door Kazakhstan introduced Central Asian tech in general to the international investment community, who are now on the lookout for the “next big thing.”

“We're benchmarking them in our conversation. Basically, we're telling investors: here is Kazakhstan on the map, and Uzbekistan is next to it. Our population is twice as large as Kazakhstan, and they buy it,” says Djumaev.

“Competition is there, so we need to secure more capital. But another reason is that we’ve already built a machine that we need to fund to make it run. This is fintech. We are profitable. Fintech is in place and it’s working. We’re converting e-commerce customers into fintech customers,” he added. For example, Uzum issued the largest ever corporate bond this year on the domestic stock exchange to fund its buy-now, pay-later business that has proved to be very popular.

Opening his app on his phone, Djumaev demonstrates that if a customer buys something on the site then if they have a Uzum account and card there are significant discounts on offer of up to 30%. Those accounts can be opened instantly online – in less than a minute – thanks to Uzbekistan’s open banking system.

“You can top it up from many cards in the world,” Djumaev said. A government-backed digital identity system, MyID, allows for rapid customer onboarding through face recognition and open banking APIs.

“First of all, you can instantly open the bank account. There’s no need to show passports. Just say ‘this is me,’ we see your face, and that’s it,” Djumaev said. And international investors are starting to notice.

“There’s a buzz, a cross-fertilisation – a virtuous circle of growth and reinvestment. If you look at us, we’re the result of the 2017 reforms. Before that, it would have been impossible to build this kind of company. You couldn’t convert local currency into dollars or euros before,” he adds.

“The population is very tech-savvy, smartphone penetration is high. Connectivity is low, and that’s why we got these results. Word-of-mouth spreads. Everyone wanted it. We changed consumption patterns as people were stuck in traditional retail,” Djumaev says. “But yes, we are at an early stage. E-commerce penetration into retail is still very low – maybe 2-3%. In Kazakhstan, it’s more than 40-50%. This is untapped potential. It’s a long journey.”

Logistics

Like with most emerging markets in the Former Soviet Union (FSU), logistics has been a major challenge, but Uzum has built its own distribution system to ensure next-day delivery across the whole country. The first warehouse launched last year; another is being built this year, all based in Tashkent. And the trucks can reach anywhere in the country in a day.

Over 400 cities and towns are now connected to the system and next-day delivery is available even in remotest regions in in the Kyzylkum desert. Uzum claims to operate the country’s most advanced logistics network in the country.

“Local producers now sell through our platform and gain access they never had before. They used to sell only at one bazaar. Now, we offer equal access across the country – we are in 400 cities. They can sell their products nationwide with one-day delivery. That’s a miracle for producers,” says Djumaev.

The firm has opted for a capital-intensive, asset-heavy strategy, building its own warehouses, pickup points and last-mile delivery infrastructure rather than relying on third parties.

“We built basically the largest warehousing facility for e-commerce in Central Asia,” said Djumaev. “We wanted to give good service. In order to do that, we had to control everything. We initially talked to a lot of players, but no one could offer us what we wanted so we decided to build it ourselves.”

While international competitors such as Russia’s e-commerce giants Yandex and Wildberries have entered the Uzbek market, Uzum still has the first-mover advantage.

“It’s still a national business. Our logistics give us an edge. Others are trying to build here, but so far, we haven’t seen the results. We are the only real operator at the moment,” says Djumaev.

The business has been enabled by the rapidly expanding middle class that are enjoying the rising disposable income that the prosperity Mirziyoyev brought with him after taking over nine years ago.

The president has also made a lot of progress in mending prickly relations with the other four ‘Stans and begun the process of forging a pan-Central Asian market, in the style of a Eurasian EU, but Djumaev says it is still too early to think about crossing any borders.

“We’re totally focused on Uzbekistan. The potential here is huge. Look at Kaspi – they make $2.4bn in annual profit. That journey started in 2008 and took over a decade. Uzbekistan is nearing 40mn people. The middle class is growing. GDP is growing. The potential here is massive – twice as much as other ‘Stans,” says Djumaev. “There is talk of regional integration. Yes, it makes sense, but it’s for the future. We think about it. But as a tech company, our roadmap is full for years. We have much to do with the core business before expanding.”