About to celebrate 30 years of independence on 16 December 2021, Kazakhstan is still a relatively young country, sometimes referred to as “30 years young”. It is a market, in particular its capital Nur-Sultan, that start-ups should have on their radar either as part of their international expansion plans or in terms of finding interesting start-ups there to seek inspiration from or to collaborate with.
One of the attractions of Kazakhstan for some will be its country neighbours and location, for example the Baikonur cosmodrome, which is leased to Russia, is based in Southern Kazakhstan and there is also a strong presence from Chinese banks as well as the EBRD and Eurasia Bank. President Shigeo Katsu of Nazarbayev University, the flagship academic institution with aspirations to become a global-level research university, has a very good description of the country “not as land-locked but as land-linked”.
In addition, precisely because the country is an emerging market and yet the ninth largest in the world, it offers scope in some sectors which may already be saturated elsewhere and/or less likely to develop, take agritech for example. Egistic is a Kazakh agritech business, a farm management system for monitoring and managing agricultural crop areas. CEO Zhandos Kerimkulov explains their ambition is to develop the platform into a super App with a range of applications, for example using it to enable banks to assess whether a farmer is good for credit; allowing farmers to make money from renting out their spare/unused machinery. He mentions this could appeal to a new generation of farmers, who spend more time away from the farm but who need to be able to manage it from a distance.
Pavel Koktyshev who is CEO of the Tech Hub, which sits within the Astana International Financial Centre (AIFC), explains that there is currently a much stronger focus on b2b including fintech – Kaspi for example is already somewhat known outside Kazakhstan – and b2g or govtech companies more than b2c. The AIFC, which was the initiative of Kazakhstan’s First President, Nursultan Nazarabeyev, launched in 2018, is the newest financial centre in the world and the only one in central Asia. Its role is to help bring new tech initiatives to Kazakhstan, supporting their soft landing and then building up new economy streams for the country. Koktyshev explains it is helping to build the tech development stream and ecosystem to support companies, “connecting the dots” with the different Ministries, whilst leaving the running of accelerator programmes to others. Because of their positioning within the AIFC where they see the problems and challenges faced by the larger firms/corporations, the Tech Hub plays an interesting role, promoting more open innovation and acting almost as professional match maker between the Kazakh banks, for example, and Tech Hub companies.
There are 1,000 companies registered at AIFC from more than 50 countries, including some from the UK, and its particular areas of interest are in Islamic finance, fintech and green finance. Whilst the country has been traditionally dependant on its oil and gas industries, it is setting its own energy goals including its aim for carbon neutrality and is seeing a growing interest in renewable projects. The AIFC has also established the first Green Finance Awards in the region and the Green Finance team from AIFC organised a COP26 event on 3rd November 2021.
Start-ups solving emerging needs in an emerging market
As a rapidly developing country Kazakhstan is beginning to face new challenges one of which is that with the increase in affordability in cars, traffic jams and car parking has become more of an issue. This is where Parqour, a parking management system which uses car plate recognition data for easy billing and monitoring, is finding a lot of interest in the big, developing cities of Kazakhstan. Cerebra is helping to solve a healthcare issue as a start-up developing AI-powered software to improve the early diagnosis of stroke and was launched in 2018 by CEO Doszhan Jussupov. Strokes are the second highest cause of death and disability in Kazakhstan which uses CT scans, a cheaper technology than, for example, the MRI scans used in the UK and other more developed countries. Whilst the next stage for development would be MRI currently there is a big enough opportunity as Russia and most of the former soviet countries use CT scans. Faceplate, which launched in 2020 is a software developer for industrial applications which improves overall equipment effectiveness (OEE). Its president, Yerzhan Janzakov, sees a big opportunity in the country around solar plants and wind farms, recently opened an office in Moscow and is now looking at the potential within Europe.
Much of the country’s start-up success is due to the tech ecosystem that is developing around them. QazInnovations is helping to grow interest in the role of business angels and the business angel network whilst supporting local businesses to go global. Nazarbayev University has its own Innovation Cluster, NURIS, focused on high-tech business creation, offering a 12-week programme and potential investment. Since 2016, the Cluster has supported 157 start-ups and provided 1m (US dollars) in grants. It has staged over 3,000 events, 80 hackathons and has future plans for an Astana Business Campus Science Park. Some of its current technopark companies, or graduates of the NURIS Business Incubation Program include:
- Educated Medical Solutions (production of disposable medical devices used in minimally invasive cardiology procedures)
- QazDron (as its name suggests producing unmanned aerial vehicle (UAV) systems)
- KazAeroSpace (remote sensing data processing techniques as well as the largest private company UAV fleet)
- Ecostandrt.kz (biological processing of organic waste)
- Okoo (interactive online educational platform for teaching programming through AI)
- Cleverest Technologies (system for the textile industry to detect defects in raw material fabrics)
- ReLive Research (for the rehabilitation of patients after a stroke, including equipment and software for reading and recognizing brain signals).
The Astana Hub which was launched by the First President on 6th October 2018 and is the largest technopark for IT start-ups in Central Asia exists specifically to develop a start-up culture in the country, supporting high-tech projects to strengthen Kazakhstan’s economy. With various arms it includes a hub space as a corporate business incubator aimed at the development of IT projects. As of October 2021, Astana Hub includes 555 companies, 54 of which are foreign. It also cooperates with international organisations including Rutec Ventures and Unbound Innovations both in the UK.
In summary, Kazakhstan is worth a look – perhaps precisely because it is not yet that well known outside of Central Asia in terms of its start-up and entrepreneurial ecosystem. Peter Foster, President of Air Astana, which is an extremely successful business owned by Samruk-Kazyna National Welfare Fund JSC and BAE Systems (Kazakhstan) Limited sums it up as “an emerging market with some challenges but it is open for business and very anglophile. You have to be all in in Kazakhstan otherwise you’re not in at all.”
