Startup to unicorn within 2 years in Uzbekistan - Djasur Djumaev and Nikolay Seleznev, Uzum

Djasur Djumaev, Founder and CEO, and Nikolay Seleznev, Co-founder and Chief Strategy and Business Development Officer of Uzum, Uzbekistan’s first tech unicorn, joined us for this episode. Uzum became a unicorn in just two years, and now serves as the country’s leading e-commerce and fintech ecosystem. In this episode, they share how they built a household name in a largely offline market, their strategy for leapfrogging infrastructure gaps, and why Uzbekistan is one of the most exciting frontier markets today.

In this episode we cover:

• (00:01:11) Why Uzbekistan had almost no e-commerce before Uzum, and how they built everything from scratch, including last-mile logistics
• (00:07:50) How they scaled to 12,000 employees in under two years and blended expat and local talent to build a winning culture
• (00:10:33) The macro case for Uzbekistan: 6.5% GDP growth, 99% literacy, 87% smartphone penetration forecast by 2027
• (00:15:27) How 50% of adults were unbanked just four years ago — and how Uzum onboarded millions to financial services
• (00:22:57) Jasur’s fundraising journey: starting with his own capital, then attracting top U.S. and MENA investors despite skepticism about Uzbekistan
• (00:28:20) Where they plan to IPO, and what’s next for Uzum as they prepare for a dual listing and regional expansion

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Transcript

00:00:00 NICK LALL
Hello and welcome to the INSEAD Emerging Markets Podcast, where we interview business leaders and emerging market experts on business innovations, market opportunities, and macro -level trends in emerging and frontier market countries. Join us for the next hour to dive deep into the world of emerging markets as we speak with top performers who are successfully investing, working, and living in these markets themselves.

00:00:24 NICK LALL
Welcome to the NCI Emerging Markets Podcast. I'm here today with Jasura Jumayev and Nikolai Salasnev. They are from Uzum. Uzum is a unicorn in Uzbekistan, a company that became a unicorn in just two years. Jasura is the founder and CEO, Nikolai's head of strategy. So really excited to have them in on the podcast just to learn more about how they grew their company so quickly. more about Uzbekistan as a market because we haven't covered it yet. And it is actually one of the most exciting emerging markets in the world right now.

00:00:49 NICK LALL
about Uzbekistan

00:00:55 NICK LALL
So I was thinking just for a quick intro, I'd love to learn about your company, how you grew it so quickly in the last two years. And why don't you just share with the audience what you do and a little bit about Uzum?

00:01:11 DJASUR DJUMAEV
Sure. Well, I'm very proud basically to build one of the, you know, successful companies in uzbekistan in tech sector we recently finalized our series a financing round and became our first tech unicorn in uzbekistan and i'm very excited about that it was not very long let's say journey to reach that destination we are now

00:01:47 DJASUR DJUMAEV
a leading ecosystem, fintech and e -commerce ecosystem in the country with more than 12 ,000, I guess, already employees. Only last year we've employed like around 3 ,000 newcomers to our company. And yes, well, we are now to present you maybe the country and the opportunity.

00:02:11 DJASUR DJUMAEV
present you maybe the country and the opportunity. where we are now because i think it's a very very interesting market where we operate yeah is one of the interesting destinations in the world is the huge potential of uzbek market supported by ongoing reforms in the country uzbekistan has a large young and educated hard -working population that not only welcomes like you know digital solutions as consumers but also eager to participate in the development of the country's digital economy work in digital sectors and build new technologies well significant population now is unbanked in the country this opens vast opportunities to provide you know innovative digital services innovative financial services and you know different products across the country We are now providing services in fintech and e -commerce all around the country. And before we came, the country was lacking the digital services. There was almost no e -commerce in the country. The e -commerce that was available was only through some social networks like Telegram or Instagram, but there was no any platforms available to trade for sellers. for customers to order their goods and receive the next day. When we came, we delivered best -in -class service and product. When we started delivering the next day, and all the goods were, you know, were reflecting the picture as it has appeared on the website, yeah? So the customers were receiving the exact goods that they were ordering. Before us, it was sort of, you know, a disaster to order something online because you were receiving the wrong goods, you were waiting for several days, and so on. So we came and we provided a very, very quality service for our customers. Along that, we have integrated financial service into the e -commerce business and created a path to affordability for our customers. And that basically, in combination with that, allowed us to reach certain results where we are now at the moment. So I think we were in the right time, in the right place when Uzbekistan was the only destination where e -commerce didn't exist, but there was a very high appetite for proper e -commerce and financial services in pair with technology.

00:05:04 NICK LALL
Sure. I mean, I think there's definitely something to be said for being in the right place at the right time. But at the same time, I mean, in two years, 12 ,000 people being able to fulfill delivery from the beginning. None of that is easy. And I was wondering, what was your preparation for creating this? I mean, what was your vision coming in? Like, did you know that within two years, your company would grow so quickly and that's the goal you were trying to hit? Definitely not.

00:05:26 DJASUR DJUMAEV
trying to hit? Definitely not. Our first forecast for the GMV. when we sat with Nikolai and we're trying to estimate, to build some estimates, was around $20 million. And then first year, we did $150 million in GMB. So that was pretty, let's say, unexpected for us. And we were building infrastructure along with growing. So it was kind of jumping without a parachute from the mountain and building the parachute. in parallel so it's it was a it was a big challenge for us to execute in that way because we had to build multiple warehouses simultaneously building operations between the different warehouses trying to deliver proper slas and you know uzbekistan was the destination where we didn't have any infrastructure up and running to build an e -commerce business we would love to have something available like 3PL, logistics providers, like warehousing, but nothing existed. The only chance for us to build a successful e -commerce company was to build everything from scratch ourselves, including warehousing, logistics, last mile, couriers, services, and build all these processes and integrate with the technological platform that we have built some kind of cities so it was a big challenge to grow in accordance with the demand that we didn't expect it was you know a very hard task for us but we managed we managed we have a very good team very strong team that already built that kind of projects around the globe and we didn't invent a bicycle in that so we basically didn't start from scratch It was a lot of operations, but we managed.

00:07:32 NICK LALL
I'd be curious to learn a little bit more about how you built the team. I mean, I guess the founding team in the beginning, how did you identify the right people to carry this out, to execute on this, and then scaling to 12 ,000 people? I mean, I assume that you yourself cannot interview all of them, so how do you go about picking the right people at this point?

00:07:50 DJASUR DJUMAEV
the right people at this point? Well, for me, it was first what I did. I created... a proper core team of my, let's say, sort of co -founding team because we started from scratch together. Nikolai was the first employee, co -founding employee that I've hired. And all of the team members that came first basically were from my previous network, from my previous companies, and I already knew them. So I've invited them to participate. them in my journey in north pakistan because i've built many companies around the world and in the technology sector and it telecom sector and basically we knew each other and i gathered first seven people and the team when we started from scratch building initial company making some acquisitions alongside so yeah we've built some companies from scratch we acquired some companies integrated them into one holding and in one year period of time we already have had up and running e -commerce business integrated fintech business where half of the gmv came from our fintech solutions and this portion is growing at the moment and we already had an integrated food and grocery delivery business. So these people were hiring more and more talents from abroad, bringing them to Uzbekistan, hiring local people, integrating the cultures where people from abroad were bringing their experience and local people were working in combination with this experience, integrating this experience into the local culture and delivering the execution. This is sort of, I think, the secret sauce, how we managed to work in Uzbekistan, because it's very important to understand the culture in order to succeed culture, traditions, history, in order to succeed on markets where you introduce new business model and technological businesses that are quite new for consumers.

00:10:05 NICK LALL
Yeah, absolutely. I think it's really interesting growing inorganically that way from the very beginning. It's a smart strategy. With any country, you need the local knowledge, but then it also is a benefit to bring in people who've done things other places as well,

00:10:06 DJASUR DJUMAEV
really interesting

00:10:13 NICK LALL
any country,

00:10:18 NICK LALL
especially when it's a newer market like Uzbekistan. I guess to that point, I'd be curious about what some of the unique attributes of Uzbekistan's market are, whether culturally or legally, anything else that makes it different from other places.

00:10:33 DJASUR DJUMAEV
Well, Uzbekistan, first of all, is a very historically rich country. uzbekistan was a part of very famous silkway yeah grand silkway and historically and i think genetically people living in uzbekistan are very entrepreneurial and uzbekistan is the second largest economy in central asia it's not the largest in terms of territory but is the most populated country in in central asia we consider our country as a gem of Central Asia because it's now one of the fastest growing economies in this region. For instance, last year we had 6 .5 % GDP growth. It's a nominal value, right? So its population of Uzbekistan is very tech savvy and I think 99 % is educated.

00:11:29 DJASUR DJUMAEV
of Uzbekistan is very tech savvy and I think 99 % is

00:11:38 DJASUR DJUMAEV
So every single child is going to school and then university and the population is deeply educated. So this creates best opportunities for businesses to provide their services or integrate products. And for our business, we have, let's say, another very important milestone is the penetration of the internet in the country. I think one of the big four companies we're projecting, I think if I'm not mistaken, it's KPMG. They were forecasting like 87 % of smartphone penetration in the country's population until 2027. It's a huge number. And the connectivity is everywhere. So this opens a very good opportunity for business, for tech businesses to provide services for the whole population. For instance, we are working. all across the country we've built the infrastructure and we were providing services everywhere so we are now delivering to every single city in uzbekistan and look maybe just to add a couple of things about the market and uzbekistan in general and its attractiveness because in my opinion it's one of the few places on earth right now that boasts such a unique macro backdrop

00:12:48 NIKOLAY SELEZNEV
just to add a couple of things about the market and uzbekistan in general and its attractiveness because in my opinion it's one of the few places on earth right now that boasts such a unique macro backdrop take any parameter or indicator you know or you can think of and it's going to be growing or outpacing its peers either in emerging markets or maybe even in the developed markets because the key thing here is and the thing that fascinates me the most is that the change is very fast the pace of the change is truly breakneck and the country and certain consumers are always or maybe not always, but in most cases, are leapfrogging certain stages of development. For instance, Uzbekistan is the first country in the CIS space with the 5G internet, with a commercial 5G internet here. As a result, it's very cheap. Two -thirds of all the adult population are using smartphones and they're savvy, as we said. This results in unique opportunities to disrupt the consumer market. Same thing's happening in retail. Like when we arrived three and a half years ago, the majority of the population was shopping on street bazaars with a very narrow assortment, very untransparent pricing and relatively subpar consumer experience. Bringing your product was like a rocket ship landing in the middle of the street. And as again, Jazur just said, The market and the consumers were ready for that innovation thanks to all the foundation that's been there. Yeah, Jezero, please continue.

00:14:35 DJASUR DJUMAEV
Another very important thing is that in 2017, Uzbekistan launched major reforms to transform from a largely state -led isolated economy to a very open market economy where they managed to create a very competitive business environment. And that also is very important to say because previously Uzbekistan was a very closed country. And now it's open and the market is really hungry for technology, for services like we are providing at the moment. So we were like in a very unique position where there's up and running, you know, connectivity. People are with smartphones. They're ready to consume. but they don't have any products and services on the market. I think this was kind of a unique situation in the world.

00:15:27 NIKOLAY SELEZNEV
Maybe just one another facet of the growth and the whole experience we've been living through here in Uzbekistan is the bankability and just the degree of unbanked and underserved population in general. Can you imagine that 50 % of all the adult population just four years ago didn't have a bank account? 40 million nation, 50 % were not using banks at all. Out of the remaining 50%, only 3 % had any actual money on it. So they have a bank card, they had a debit card, but they were not using it. There was a cash economy, but the beauty, again, I'll reiterate the idea of the pace of the change, is that we have 16 million monthly active users on our platform right now. We are issuing these. bank cards that have a pre -approved credit limit attached to it, which essentially turns it into a credit card. No one ever believed it's possible in a country that we're not using any fintech services, but hey, they're ready. They're ready and they are no different from any other consumers who are willing to shop, who are willing to choose, or willing to transact. And if you bring a proper product there, you will become a household name. Because right now, just maybe last example and just over to you on the brand we're building there. We are not investing in brand anymore because we are beating brands that have been in the market for even centuries. Can you imagine that Coca -Cola is less known than Uzum in Uzbekistan?

00:17:06 NICK LALL
Definitely, yeah. I mean, I think it's always a really exciting opportunity when a country opens up like this, whether it's been some of the former Soviet countries or Myanmar. different places we've seen along the past several years when this happens there's just so much opportunity and i really liked nikolai's point about you can create a household name in a place like this right now just because there aren't other brands that exist i was curious if you have thoughts on what other opportunities might be there for entrepreneurs who might want to come to uzbekistan and start a business or any advice you might have for someone who might want to start a business in uzbekistan first of all i would say that

00:17:40 DJASUR DJUMAEV
of all i would say that There's a lot of opportunity to start a technology business in Uzbekistan. A lot of talented people to hire, and the government is investing into it. There are a lot of schools that are going up with the really, really talented technological engineers,

00:18:01 DJASUR DJUMAEV
technological staff, I would say. And there's opportunity to hire people. at not such a large cost that it may be around the globe and other destinations where there are already up and set markets available and the companies are existing.

00:18:20 DJASUR DJUMAEV
If someone wishes to come to Uzbekistan and start a tech business, I'd say that the population is there. It's a rapidly growing population. And it's very young. 60 % of the population is under 30 years old. Can you imagine? They all have smartphones. They're ready to consume. They're technologically savvy and advanced. They want to consume new services. They're very up to new technologies. And I would say they're smart, right? Market is there. Market is there. Conditions that government created for entrepreneurs, I think they're one of the most interesting, and I would say, attractive in the world in terms of taxation, in terms of legislation. Entrepreneurs in Uzbekistan are considered as holy costs.

00:19:15 DJASUR DJUMAEV
The leadership in the country and the government is investing very actively into building this type of a layer of entrepreneurs that are either local or they're coming from abroad to support them bringing new businesses into the country. and to grow GDP. This is the main goal. They're a very business -oriented approach as far as what we can see at the moment with the business. Because another thing I would say is that there is an opportunity for business models that succeeded globally in other countries to be implemented in Uzbekistan. Because we are now at the very, very early stage of implementing new business models, right? So we came with e -commerce, but there are a lot of businesses around e -commerce. And startups now are rising. They're coming either from international entrepreneurs or local entrepreneurs, whatever. We're building banks, you know, neobanks. We're building fintech. And a lot of businesses are rising around us as well. But there is a space for new businesses, new business models that can be consumed by these customers. I'm sure that some of the business models can be as successful as ours in terms of the growth, in terms of the rocket growth that we have achieved because there is no businesses like that still. And there's a huge opportunity, huge and that potential for implementing new businesses. And it's the, I think, the matter of the research for them. the proper research of educating the market and understanding the needs of the customers in mixture with the culture of the locals, what they do, what do they prefer, and so on. A lot of very good opportunities for tech businesses to start in Uzbekistan. Yeah.

00:21:14 NIKOLAY SELEZNEV
Probably as an additional color from a little bit of a different perspective, my single piece of advice would be not to be afraid. It's not that dangerous or, I don't know, the rumors are, in general, not true. It's very hospitable. It's very welcoming. And it's really a land of opportunity here. You may think about it as a combination of a Wild West or a Klondike here, where you can start from a very low base, bring about your talent and expertise, maybe some capital from abroad, then build something spectacular here. And tell you what, having been living in Tashkent for more than three years, it's a great place. It's a great place and it can really compete with certain capitals across the globe and potentially in the next 15 years with global cities. The weather is great. We have mountains, we have ski resorts like 45 minutes from here. the travel is available across the region you can fly it in three hours time you'll be in dubai in six hours time you'll be in japan it's in the center of a central asian revolution and that's the beauty of it yeah i still haven't made it out there but from the pictures it looks beautiful so definitely on the list i think to the point on bringing capital from outside of us back then i was curious if you could talk a little bit more about your own fundraising journey how

00:22:34 NICK LALL
i still haven't made it out there but from the pictures it looks beautiful so definitely on the list i think to the point on bringing capital from outside of us back then i was curious if you could talk a little bit more about your own fundraising journey how you initially raised for Zoom, what your story was to the investors and how many of them were local versus international investors and how you convinced them on the potential for Zoom.

00:22:57 DJASUR DJUMAEV
Well, I started investing in this company as my own funds when we just started this journey building ecosystem. At the initial stages, we didn't expect that it will be an ecosystem. We started with a bank. thinking of making a neobank and then we looked at the different business models in the near neighboring countries we found some you know good examples that were already public and listed in international stock exchanges like caspy so we decided to you know bet high on creating something bigger than just neobank and the country and We've decided to create an ecosystem. And our first investment was my investment, basically, from my previous exits. So I've reinvested my funds into acquiring some businesses and starting up some businesses that are currently now part of the ecosystem. Then we faced this amazing growth, brokering growth in the country, and we realized that we need more capital. It's definitely should be funded by some professional investors. And we created our path towards bringing this company someday public. And yeah, we've approached different investors around the world. And Nikolai basically was in charge of that process. And we've managed to attract investors from US, from MENA region at our initial round. And I think Nikolai can comment on that and maybe state some names and so on. Yeah,

00:24:45 NIKOLAY SELEZNEV
sure, sure. Happy to spread some good words about the country and our journey here. As you just said, the original investment came from him because he was the original investor who created and made this whole story possible. But then the momentum is here and it's the biggest... Maybe the biggest asset here is time because the momentum is now in Uzbekistan. And even though we've been profitable from the get -go, from the very beginning, we needed money. We found ourselves in a very interesting position. We needed money to make money. And this is why we've been busy over the last couple of years talking to a number of investors, VC and private equity growth type of funds. and managed to find a great combination of investors who were very supportive and really helpful in terms of basically putting us above the radar for the international investor community. Because can you imagine that to do our Series A round, our first external funding round, we spent probably 80 % of our time pitching the country. Not the company, because the feedback we were receiving was that the strategy play is very familiar. It's understandable. The numbers are speaking for themselves. The team is there. But what about Uzbekistan? Everyone was afraid of Uzbekistan. And it's such vast changes, they do not happen overnight, right? So it was one step at a time. And I don't know what moved the needle, but now it seems like... We are in a very right sport because we are now finalizing our tactical round because we decided to give some opportunity to the guys who've been observing the company and its growth and its development ahead of the big funding round. Because the idea was not to create a Uzbekistani technological unicorn, but to do a first public. technological unicorn from Uzbekistan. And as Jazur always says, to achieve great things, two things are needed, a plan and not quite enough time. So the idea was to do it in five years instead of 10, as it usually takes, in general, the companies to go public. That's why we've been looking for the partners who will be supporting us over this whole journey and found them in the US and in MENA. We'll be soon announcing very good news because some other private equity and growth type of funds will be joining the cup table in the next, I don't know, maybe four weeks from now. And after that, we'll have a very, very clear path to execute on the original strategy. Amazing.

00:27:50 NICK LALL
First of all, it's always great when you can start with your own money and put off getting the investors until...

00:27:56 DJASUR DJUMAEV
That was a very high bet for me.

00:27:58 NICK LALL
me. I almost invested all of my money. It definitely takes a lot of courage to do that, but it just worked out and shows the confidence you had and the potential of the Zoom, which is amazing. In terms of going public, is there a place where you'd like to go public? I mean, is there a Uzbekistan stock exchange or are you targeting more internationally?

00:28:20 DJASUR DJUMAEV
Well, we are incorporated in Abu Dhabi global markets. Because we had to provide some confidence for investors in terms of legislation, right? So we had to find some destination where we can use the English level. And one of the most comfortable locations for that were UAE and Abu Dhabi Global Markets for us. And it's very popular for entrepreneurs building companies in Uzbekistan. And I think speaking about our future IPO, we think that... It could be some sort of a dual listing when we list first an Abu Dhabi stock exchange and then go and find some other location where liquidity is there, where investors are familiar with the market. And in that way, one of the companies in the neighboring country in Kazakhstan did a very, very successful...

00:29:18 DJASUR DJUMAEV
let's say, journey for themselves. And we're benefiting from that because they've already introduced this type of business model to the global investors community. And they are now currently publicly listed in Nasdaq. And I think we will have a chance to introduce almost the same business model, but on a larger market with a huge in -depth potential that may result in much more higher growth in the next decade. So, yeah, returning back to the locations of RPO, I think it could be some sort of Abu Dhabi exchange and maybe NASDAQ. Yeah, sure.

00:30:00 NIKOLAY SELEZNEV
Makes a lot of sense. Look, Nicholas, I'll probably add a little bit of color, sort of partly responsible for the process. The focus for us right now is on this free IPO round that we're going to... do either in Q4 or maybe Q1 next year, Q4 this year, Q1 next year. And after that, we'll finalize our decision on the actual venue for our IPO. However, having said that, I do believe being the first technological unicorn or sort of a trailblazer from Uzbekistan, I would be very happy to do at least part of it locally. Because the Dutch stock exchange and the capital market here is also undergoing rapid change and development. And as Jasura rightfully said, the liquidity, unfortunately, is not here yet. But maybe in two years' time, when it's going to be our IPO moment, we'll see a completely different story, just judging. thinking about the change here and the pace of it, we might well do it locally.

00:31:15 NICK LALL
Definitely. It's really exciting. Looking forward to seeing the progress that I'm sure will be quick like it has been so far a few. Look,

00:31:23 NIKOLAY SELEZNEV
as I said, Uzbekistan is a 40 million nation and we have more than 60 million in... terms of monthly active users that's like two -thirds of all their smartphone users or roughly half of all the adult population there out of them we continue growing because the the the idea of the ecosystem play is that you you're sort of hook stick monetize type of thing is happening if you think about it it's sort of a funnel where you attract customers on your e -commerce platform then you retain it them through your customer through daily banking through high frequency transactions and then you monetize them primarily on credit products and we became the e -commerce of uzbekistan through our uzum market and uzum test core businesses and now as just said we managed to add more than 1 .5 million banking customers who are using our credit cards in a matter of five months after the launch We plan to issue more than 5 million cards by the end of this year, essentially becoming the largest retail bank in the country. I mean, the new bank, because we believe that digital is the way and digital products will dominate this region. And maybe to just quickly go back to this idea of leapfrogging, this is what we saw in e -commerce. where the customers are jumping from bazaars straight to e -commerce. We believe this is exactly what's happening in fintech and in financial services in general. People are attracted to using financial services in their smartphones, even though... branches, physical branches, still very important from both branding and physical presence perspective. More and more people are doing everything in smartphones. We believe this is the next big thing here, and that's why we are onboarding these customers and providing them with credit limits. This is our game plan for the next Cowboy Quarters, and we'll see where it takes us next year. I still... believe we are just scratching the surface because the potential is huge not only in uzbekistan but in in the wider region the the region that has long been neglected and under capitalized is finally getting into the spotlight and variable deserves yeah it definitely seems like a place with so much potential in the world these days it's a place where investors should look when things are a little bit uncertain in some of the more developed markets and i think that

00:34:00 NICK LALL
yeah it definitely seems like a place with so much potential in the world these days it's a place where investors should look when things

00:34:01 NIKOLAY SELEZNEV
it definitely

00:34:07 NICK LALL
are a little bit uncertain in some of the more developed markets and i think that The demographics just allows a lot more opportunity than places where things are a little bit uncertain right now. So it's a place that a lot of people should be looking. And one other thing I would just be curious about, I mean, given the culture there, I remember you mentioned something about that your loans are Sharia compliant. That was something that you had to focus on when building a fintech company in Uzbekistan. I was wondering if you could talk a little bit more about that and what that might mean for Uzbekistan and the wider region.

00:34:35 NICK LALL
was wondering if you could talk

00:34:39 NICK LALL
and the wider region. given that that's something that may not have existed there, at least digitally, before this.

00:34:47 NIKOLAY SELEZNEV
So look, the quick answer would be is that even though the majority of the population is Muslim, it's relatively secular. So it's a combination of several products that suit the customer best. For certain percentage, certain cohorts of our customers, Shuri -compliant products are important. And as a result, we have a Shuri compliant BNPL, Buy Now, Pay Later Products, which are essentially credit products because you are allowed to consume more today and pay it later tomorrow, even though it's done, as I said, in a Shuri compliant way. For others, we have these traditional cash loans or credit cards, and they are also very, very popular. Very pleased with the... performance of these cards, which basically proves the point that it's up to the customer to decide which products use him better. And we are here just to provide and to cater essentially for the needs of the population.

00:35:52 NICK LALL
Sure. Super interesting stuff. Really cool to see a very exciting emerging market company succeeding in a really exciting market. So it's really a pleasure to have both of you guys here. Thank you so much for joining the podcast.

00:36:03 NIKOLAY SELEZNEV
Thank you very much, Inglis. It's been a