Innovative start-ups may not be the first thing that springs to mind when Central Asia is mentioned, but the region has in recent years been quietly carving itself a niche, especially Kazakhstan and Uzbekistan. The two countries now have start-up hubs, accelerators, and – crucially – an emerging venture capital ecosystem.
Kazakhstan’s capital Nur-Sultan has been leading the way in winning recognition in the global start-up world, with Startup Genome, a research and policy advisory organisation, awarding it a maximum 10 in its latest funding growth index, which measures growth of early-stage funding. According to Startup Genome, the average seed round of a start-up in Nur-Sultan is around 300,000 US dollars, a decent amount not too far short of the global average of 494,000 US dollars.
Start-ups are also quickly catching up with the kind of services that western firms have been offering for years. ApartX, a service for owners of rental properties lets its clients manage their units remotely and safely using smart locks.
Of the currently active funds, QazTech Ventures, a US-based fund, is one of the biggest players which cooperates with 500 start-ups. QazTech also conducts search and selection of Kazakh start-ups for the Singapore-based VC fund Quest Ventures.
“Angel investing is a key to early stage start-up development. But in Kazakhstan not all investors are experienced angels. Our member angel investors are helping to grow and develop start-ups by introducing them to new investors, strategic partners and providing necessary expertise,” Ruslan Rakymbay, founding member of QazAngels, tells Emerging Europe.
“Indeed, start-ups are a new thing, but the ecosystem already has incubators, accelerators, VC funds and start-ups. Not a lot, but this is only the beginning. Kazakhstan still needs to work its legislation/regulation in that field, develop and grow in quality and quantity acceleration programmes, and provide incentives for investors to invest,” he adds.