Uzum Bank issued shares amounting to UZS 150 bn ($11.9 mn) as part of its strategy for additional capitalisation, the Unified Portal of Corporate Information reported. The securities will be placed in Continent Arm Investments, a company established by Uzum. Furthermore, Uzum successfully garnered $114 mn through a blend of Series A funding and debt financing. This achievement propels Uzum to the forefront as the inaugural tech firm in Uzbekistan to attain unicorn status, with a post-money valuation surpassing $1 bn.
The procured funds are earmarked for the enhancement of the nation’s IT and logistics infrastructure, as well as the financing of Uzum’s own BNPL service.
In the Series A funding round, Uzum secured $52 mn in equity, comprised entirely of primary investments. The round was spearheaded by the international venture capital firm, FinSight Ventures, whose portfolio boasts companies like Intercom, ThoughtSpot, Automation Anywhere, Toss, GupShup, Razorpay, Bumble, Rappi, Carta, and others. Joining them were Xanara Investment Management, a multifamily office in the UAE, and Uzum’s senior management team. In addition to this, the company separately raised another $62 mn through debt financing.
Investors participating in the Series A funding round will acquire stakes of less than 5% in the company. Considering Uzum’s robust performance in 2023, its inaugural full year of operations, and the ecosystem’s vast potential, the shareholders opted not to significantly dilute their ownership stakes during the funding round. In 2024, Uzum intends to secure approximately $200 mn in additional financing in a Series B funding round from investors in the Middle East, the United Kingdom, and the United States.
The Uzum digital ecosystem, which amalgamates e-commerce, fintech, and banking services for individuals and small and medium-sized enterprises, encompasses a marketplace, an express delivery service, traditional and digital banks, a BNPL service, an automotive marketplace, and an app for entrepreneurs. All components of the ecosystem are currently being integrated into two superapps: Uzum for individuals, and Uzum Business for legal entities.
By the end of 2023, the Uzum ecosystem had 10 mn monthly average users and a net profit of just under $100 mn. Uzum’s retail banking and fintech businesses were among the country’s leaders in terms of profit, and its e-commerce business was the largest online platform in Uzbekistan by user count and order volume, with a turnover of around $150 mn.
Future plans
In 2024, Uzum plans to inaugurate the country’s largest logistics complex for e-commerce, which is projected to boost e-commerce turnover on its platform by more than 150% during the year. It also intends to launch a series of ecosystem products for unsecured lending to individuals as well as small and medium-sized enterprises.
“Digital services in Uzbekistan today are incredibly popular. We see this in the growth rates of the markets that we work in as well as in our own experience. In a little over a year, we have built an ecosystem whose services are used by more than 10 million people in Uzbekistan every month. Last year, we earned nearly $100 million in net profit, and we intend to increase this figure this year, partly by integrating services within the Uzum ecosystem. We also plan to add new business streams and services for business and private users to the ecosystem this year. ”
- Djasur Djumaev, Uzum’s founder and CEO, said.
In April 2023, Shavkat Mirziyoyev, the President of Uzbekistan, signed a law mandating a phased increase in the minimum amount of authorised capital for banks. The minimum capital requirement is set to increase to UZS 200 bn ($15.9 mn) from September 2023, UZS 250 bn ($19.9 mn) from April 2024, and eventually reach UZS 500 bn ($39.7 mn) in 2025.
Banks are obligated to meet these capital requirements within the specified deadlines. This applies even in cases of mergers, splits, or spin-offs. However, exceptions may be made for banks undergoing privatisation with the involvement of foreign investors. In such cases, the Central Bank may set different deadlines.
Earlier, it was reported that Uzum Market announced the launch of its new car-buying service, Uzum Auto, currently in its testing phase. As for now, the service allows customers to purchase vehicles from dealers located in the capital. However, Uzum Market has plans to broaden its dealer network across the nation and to include private sellers in the future.
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