Kazakh IT Sector Soars with Thriving Startups and Global Partnerships 

ASTANA Leveraging its growing economy and skilled workforce, Kazakhstan holds significant potential in the IT sector. The country is committed to strengthening its digital infrastructure and advocating technological progress to attract investments and foster innovation.

Photo credit: 24.kz.

IT industry development 

The IT industry has demonstrated notable advancement, marked by the rise of numerous thriving startups and enterprises. The exports from this sector have consistently grown, underscoring the country’s competitiveness and capacity for global partnerships.

Magzhan Madiyev, Astana Hub CEO emphasized that comprehensive efforts are needed to develop the IT industry. Photo credit: digitalbusiness.kz.

According to Magzhan Madiyev, Astana Hub CEO, comprehensive efforts are needed to develop the IT industry. 

“To give impetus to the IT sector, it’s crucial to introduce tax incentives, update the education system, establish accelerators, networking platforms, and communities, and cultivate venture financing,” he told Digital Business news agency. 

Madiyev highlighted several sectors with significant potential for development, including gov tech, digital mining, fintech and the broader areas of game development, metaverse, virtual and augmented reality.

“It is crucial that we operate within an exponential industry. Once the core is established, growth can accelerate rapidly, much like a snowball effect. I am hopeful that by achieving $500 million in exports by 2025, or possibly even earlier, the following year could see us reaching $700 million, and then another year hitting $1 billion and beyond,” he said.

Startup stories 

Among the startups showing significant potential is Biometric.Vision, a Kazakh startup founded by Alibek Narimbai in 2018. It employs biometric technologies for face recognition and processing tasks like registration and identification in mobile applications, ATMs, and software programs.

Alibek Narimbai, Biometric.Vision CEO. Photo credit: digitalbusiness.kz.

The company provides biometric solutions to the National Bank of Kazakhstan, serving several Kazakh banks, microfinance organizations (MFOs), and various startups, including Naimi.kz. The project also collaborates with the Kazakh Ministry of Education, acting as a technological partner in administering the Unified National Testing (UNT) program.

“In the UNT, there is a private company that works with the ministry, and we are its technical subcontractor. We verify whether the exam taker is the actual applicant or someone resembling them. After the test, the system assigns a seating location to the individual, reducing the likelihood of cheating. Regarding the National Bank, our approach is different. They maintain an Identity Data Exchange Center where banks and MFOs share client information, including biometrics, Individual Identification Numbers and ID. This data is then cross-referenced with the national database,” Narimbai told Digital Business news agency.

The startup also offers a solution based on facial recognition technology to identify individuals. By uploading a photograph of a person, such as a criminal, the system quickly retrieves publicly available information about that individual. Additionally, the startup’s team is working on developing emotion recognition technology to anticipate human behavior.

Biometric has commenced its expansion into international markets, establishing partnerships with companies in the Kyrgyz Republic and Uzbekistan. Moreover, the startup has set up an office in Delaware and is planning to extend its reach into Southeast Asia and the MENA (Middle East and North Africa) region.

“We’re adopting a phased approach,” said Narimbai. “By establishing a headquarters in Delaware, we’re creating a compelling venture narrative. Operating as an American company makes us more attractive and understandable to investors. As for Southeast Asia and the MENA region, our plan is to open operational offices in Singapore and Dubai. At the moment, our primary focus is on Southeast Asia, especially Indonesia and Malaysia,” he added.

Accelerator programs 

Astana Hub, in partnership with Google for Startups, administers the Silkway Accelerator program, which is designed to nurture the growth, expansion, and attraction of investment for startups. This collaborative initiative specifically targets startups in the Product-Market Fit and Scale stages from Azerbaijan, Central Asian countries, Georgia, and Mongolia.

Bazar Purevjav, a Fibo Cloud CEO highlighted the Silkway Accelerator program’s transformative impact on startups, noting that it encourages broader thinking and shifts mindsets. Photo credit: digitalbusiness.kz.

Bazar Purevjav, the co-founder of Fibo Cloud from Mongolia, successfully completed the first stream of the Silkway Accelerator program. In an interview with Digital Business, he highlighted the program’s transformative impact on startups, noting that it encourages broader thinking and shifts mindsets.

“Over the course of three months, we secured an agreement with a prominent local public sector company, testing numerous hypotheses while actively searching for clients and engaging in negotiations,” Purevjav said.

During the accelerator program, Fibo Cloud experienced a 22-fold increase in their monthly recurring revenue, facilitated by a contract with the Mongolian government for cloud services. Fibo Cloud specializes in delivering cloud services and complex technical projects. With cloud services becoming increasingly popular for businesses, the benefits of streamlined scalability and reduced overhead tasks like hosting and server management are becoming more apparent.

Their product, Oblako.dev, offers Platform as a Service (PaaS) solutions, eliminating the need for startups to set up their own infrastructure for hosting applications. This accelerates application deployment by developers and allows immediate user access to the IT product.

“Our current focus is on establishing a strong presence in Kazakhstan, which serves as an excellent launchpad into the Central Asian markets,” Purevjav added.

Another successful startup that gained not only valuable experience but also secured $1.1 million in investments during the Silkway Accelerator program is Zypl.ai. This venture, based in Tajikistan, offers a unique Software as a Service (SaaS) that enables banks and microfinance organizations (MFOs) to make quick and accurate loan underwriting decisions for consumers, whether conducted offline or digitally, irrespective of their credit history.

Azizjon Azim, Zypl.ai CEO said that in the 12 weeks of participating in the Silkway Accelerator, their project achieved a significant breakthrough compared to its previous year and a half of operation. Photo credit: digitalbusiness.kz.

Azizjon Azim, the project’s CEO, revealed that their initial goal was to raise $600,000 at a valuation of $6 million. However, by the end of the accelerator, they received two additional investment offers, each totaling $500,000. The competitive interest from venture investors culminated in a total investment of $1.1 million at a valuation of $10 million.

“In the 12 weeks of participating in the Silkway Accelerator, our project achieved a significant breakthrough compared to its previous year and a half of operation. This included a fivefold growth in monthly profits and an increase in the number of paying enterprise customers for licensed access to our artificial intelligence (AI) software, from one to seven. This success enabled us to reach a breakeven point,” Azim said.

Azim further noted that a significant challenge for banks and MFOs is the creation of credit scores based solely on internal data and credit bureau records. By utilizing synthetic data, Zypl.ai develops customized credit scores for each individual bank or MFO, taking into account the current market landscape and its dynamics.

Zypl.ai has acquired corporate clients in Central Asian countries and is aiming to penetrate new markets in the Middle East, North Africa, Southeast Asia, and Eastern Europe.

As part of its efforts to find the ideal balance between technology and human resources, Astana is gearing up to host the Digital Bridge 2023 international technology forum on Oct. 12-13. The forum will delve into the evolving role of AI in today’s world.

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