Venture investor Murad Abdrakhmanov arrived in Tashkent in September to assess the local market’s prospects and meet potential business partners. Kursiv Uzbekistan sat down with the visitor to the capital to discuss the state and outlook of Uzbekistan’s venture ecosystem.
About the speaker:
Murad Abdrakhmanov is a serial entrepreneur and business angel. He began his career in the 1990s in telecommunications, later implementing various projects, mostly in the tech sector. As a venture investor, he has invested in more than 50 start-ups worldwide.
He is regarded as one of the largest business angels in Central Asia.
Uzbekistan offers a fertile ground for investment
What attracted you to Uzbekistan?
As a resident of Kazakhstan, I view Uzbekistan as a brotherly state. I have many acquaintances and friends here. Naturally, I have always had an interest in Uzbekistan, but in recent years, it has grown and become more business-oriented, as the country is changing rapidly: both the economy and the people. There are many opportunities, and numerous market niches remain untapped.
Moreover, Uzbekistan is a young country. Talents emerge in this environment, and venture investors are particularly interested in talented developers and tech entrepreneurs.
You mentioned that many niches in Uzbekistan’s market are still vacant. Could you elaborate on which niches these are?
For investors, more economically developed countries often represent a “red ocean” (markets with high competition). In Uzbekistan, however, there is a “blue ocean” (opportunities to create new markets). This provides fertile ground for attracting foreign investment.
There are many interesting niches. Fintech, which is already actively developing in Uzbekistan, is particularly appealing to venture investors. Given the abundance of young people—the largest in Central Asia—the market potential over the next five to ten years is extremely high.
The payback period for venture investments is quite long. Are you concerned that the rules of the game might change in the local market?
Honestly, we are not worried about that. Fintech services are essential for people, and there are no objective reasons not to develop them under any economic conditions.
The question is whether the projects that receive venture investment will be successful. There is always a degree of risk in this, and one has to accept it.
Uzbekistan’s venture ecosystem is in the early stages of development, but it will evolve. I have seen similar situations in Kazakhstan. Your country will experience a comparable scenario.
Young entrepreneurs need support
Have any specific agreements been reached following this trip to Tashkent?
We did not come to Uzbekistan looking for specific projects. In the venture industry, a business angel should focus more on giving than taking. Our priority right now is to get involved in the local market. We want to share our experience, advise start-ups, give lectures to students, and meet future colleagues.
The ecosystem in the country is still young, and start-ups are seeking investments, but over time, this will change. Investors will begin to compete for promising projects, and this is the direction Uzbekistan is heading.
In this context, our task is to maintain our reputation as the investors of first choice, those who can not only provide funding but also offer expertise. We have been working in this field for ten years and have a range of tools to help start-ups avoid common growth pitfalls.
Are Uzbekistan’s business circles showing interest in the venture market?
Over the past few days, I have met with local entrepreneurs. I see that they have solid international education and experience and are interested in the venture industry. This is not surprising; when a person reaches a certain level in their business career, they realise the need to share knowledge. Venture capital is a good way to do this because it involves working with young market participants. In a sense, we are talking about volunteerism and mentorship.
For Uzbekistan, the main priority at this stage of the venture ecosystem’s development is to support young entrepreneurs through both experienced colleagues and the government. The authorities are already doing a lot in this regard, and I believe these efforts will intensify, improving the business climate.
It is also important to develop a community of business angels. In some countries, such as the United Kingdom, venture investors receive tax relief on part of their tax payments. This is an excellent support measure because such investments carry high risks, and the government shares these risks through incentives.
Toxic investors and lack of funding
Uzbekistan’s venture ecosystem is less developed than Kazakhstan’s. Given this difference, what challenges might the Uzbek market face in the future?
In reality, our market is not that far ahead of yours. The problems are quite similar everywhere. The primary issue is toxic investors—businesspeople with specific experience, especially from the 1990s, who try to apply it to start-ups, but it is often irrelevant. We try to explain to colleagues that the familiar methods do not work in the venture market. Attempts to take large stakes in projects, for instance, only increase the risk of their closure.
The venture industry is well-structured, with established paths for a start-up to succeed, as well as typical mistakes that project leaders and investors can make. We share this knowledge not only with our colleagues but also with young developers.
We place special emphasis on building relationships between start-ups and strategic partners—large companies in the Enterprise sector. There is often a conflict of interest, as these companies, even when acting as investors, still focus on developing their businesses. After exploring the areas that interest them, they may buy a competing start-up or launch their project. Therefore, we advise not to accept large cheques from Enterprise companies and to work with them under a specific strategy.
Our ultimate goal is to ensure that start-ups and investors can make Win-Win agreements. This is not easy but is achievable if the right negotiation methodology is followed.
What other challenges do Uzbek start-ups face?
One issue is the lack of funding during the early stages of project implementation. The authorities in Uzbekistan are taking steps to address this, and the country now has four funds. However, private initiative is still lacking.
In Kazakhstan, in addition to government support structures for start-ups, there are numerous private funds. We also have a strong angel investor community. I believe this is the optimal path for Uzbekistan.
It opens up new opportunities not only for young people and the country as a whole but also for entrepreneurs themselves. In today’s world, technology evolves rapidly, and venture capital allows people to be active participants in this process, not just observers. It’s about leading the way rather than catching up.
It is also an opportunity to share knowledge and experience and to learn something new. Every project pitch is a mini-lecture. Listening to 250 pitches a year can provide a wealth of new information and insights. With the right approach, this can also generate profits. However, as I mentioned, venture investment is not about making money; the financial return is a side effect.
Advice for aspiring entrepreneurs
You have been working in the venture market for ten years. How has the market changed over time?
Public perception of venture investment has shifted. Seven years ago, it was seen as a statistical outlier, but now people recognise its potential. There is a growing understanding that technology can transform not only the business landscape but also everyday life. In Kazakhstan, this awareness came after the success of Kaspi Bank, which became the country’s largest fintech project through active innovation.
The nation’s greatest asset is no longer its resources; the focus is shifting to human capital. Oil and gas are not infinite, and the potential for growth lies in well-educated young people who can develop their products. There is a global competition for this talent.
Therefore, young people need a supportive environment in local markets. Today’s students need incentives and funding so that their innovations can compete globally tomorrow. Even if some funds are spent in vain, it is not a problem. The path of innovation and venture is more about learning from mistakes than winning every time.
Please share your recommendations for aspiring entrepreneurs and venture investors.
There are many pieces of advice I could give, but I would like to refer to Jack Ma, founder of Alibaba Group. He advised young people to first graduate from a good university to gain a solid background, then work in a tech company, preferably non-governmental, to learn practical business skills, marketing strategies, and working with people. Another good option is to pursue academic research after graduation. Finally, after turning 30, one can start their own business.
In Uzbekistan, a generation with this mindset is already emerging. In two or three years, there will be hundreds and thousands of start-ups instead of dozens. This environment is ripe for the emergence of unicorns (companies valued at over $1 billion).
As for new venture investors, I would recommend not starting with large investments. Join projects with other business angels, and work with smaller cheques—this approach will help avoid disappointment in your endeavour.
