Tashkent, Uzbekistan (UzDaily.com) -- Most startups from Uzbekistan today are focused on the Western market, but there are other promising directions.

For example, the Gulf countries may become a more profitable and faster option for receiving investments and finding new clients. This region is not oversaturated with local offers and is ready to invest millions in the IT sector, attracting specialists and technologies from other countries.

For Uzbek startups, the Gulf market is attractive from two points of view. Firstly, this is a large and completely new market for the region in terms of a large number of potential customers. Saudi Arabia, Qatar, UAE, Oman, Kuwait and Bahrain are currently undergoing a phase of rapid digitalization.

Even countries with developed digital products in certain areas are now interested in digitizing all areas in the country.

We already have successful examples of cooperation between startups from Central Asia and the Gulf countries. For example, the startup zypl.ai from Tajikistan, which has signed cooperation agreements with a number of banks in the Gulf countries.

Secondly, more than 500 venture funds operate in the Gulf countries today. This is an exciting and new opportunity to access funding and investment not only from Silicon Valley, but also from a region where there is a strong appetite for venture capital investment. Today, most of this money is invested in American startups, but the more we promote the Central Asian region in the Persian Gulf, the more we see interest from Arab investors. Both institutional and private.

There are a number of areas that are of greatest interest to the Gulf countries. Each of these areas is represented among Uzbek startups. These are the oil and gas sector, energy, telecommunications, banking sector and the sector of digital services for the population. All these areas in the Gulf countries need higher quality digital products, which they can get from companies operating in Uzbekistan.

Speaking to businesses and government officials in the GCC, it is clear that there is some fatigue with the poor quality of digital products some of them are receiving from Southeast Asian countries. Therefore, cooperation with international companies, with development centers in Uzbekistan (EPAM, Exadel and others) is presented to the Gulf countries as an opportunity to gain access to the highest level of digital products at affordable prices.

Barriers to startups entering a new market

Most startups in Central Asian countries have been preparing for many years to attract the interest of investors from Silicon Valley. Obviously, both the cultural codes and the approach to doing business in the Gulf countries are somewhat different from how they do it in California. A certain obstacle at first for Uzbek startups may be cultural differences between the investors that startups from Uzbekistan are accustomed to and the investors they will meet in the Gulf countries.

Another important point for founders is that they need to take time to get to know the new market. Who are the main stakeholders in the region and each individual country? Who should you talk to? What might interest them?

At the moment, Uzbek startups in this region have no other objective obstacles. Since the Gulf countries are interested in attracting more product companies (even at an early stage) from other countries. In particular, StrategEast’s partnerships with the Saudi Arabian Ministry of Investment and the Monshaat (Small and Medium Enterprises Agency), with Qatari funds and government institutions and similar organizations in other countries in the region have already led to the fact that we have introduced dozens of startups from the countries to potential investors Central Asia and, in particular, Uzbekistan. This year, StrategEast plans to bring over 100 more startups from the region to explore institutional opportunities in the Gulf countries.

What support measures are there for foreign startups in the region?

Along with the initiatives being carried out by the IT parks of each Central Asian country, it is important to highlight the support provided to startups by the Future Growth Initiative program from USAID. Thanks to this program, dozens of startups in Uzbekistan have already received support - both at the acceleration level and at the level of startups’ participation in programs in the Gulf countries. Over the next few years, this program aims to help and support startups from Central Asian countries in gaining access to the Gulf market.

As part of the StrategEast partnership with the Kingdom of Saudi Arabia, we provide those startups that will take part in our events with accommodation and the opportunity to have their own branded stand for free.

It is also planned to soon hold a qualifying competition for startups from Central Asia, the winners of which will take part in the UAE’s main startup event, Expand North Star, scheduled for autumn 2024. Cooperation in this area with Qatar is also expanding significantly. Already this year, a number of Central Asian startups attended the Web Summit in Doha, and next year StrategEast plans to make the presence of Central Asian startups at this event truly noticeable.

StrategEast tries not to miss a single public event that takes place in the Gulf countries. Such events (tech conferences, exhibitions and technology shows) are a good prospect for connecting Arab investors who are ready to invest money in startups from Central Asia and the founders of these startups. It is partnerships with the public and private sectors in the Gulf countries that make it possible to successfully promote the reputation of Central Asia as a reliable provider of digital services and will lead to tangible results in the very near future.

How startups from Uzbekistan can enter the Gulf market

The first and most important thing is to take part in a lot of technology events in the region and take a little closer look at the market. Understand which startups are already in demand and interest of Gulf investors.

Secondly, you need to try to communicate with a large number of potential investors at these events. Even if they do not invest in this particular startup, the founders will have an understanding of what interests investors today.

Third, it is important to try to reach local partners or clients in the Gulf countries. After all, in order for an investor to believe in you, it is important that someone in the region has already used your product. It is important to understand that the Gulf countries feel like a single region. Therefore, in order to interest an investor in any of the Gulf countries, it is often enough that you have clients in one of the countries in the region. Very often we hear from investors: “Where else in the Bay Area are you working?”

To sum it all up, I am truly convinced that Uzbek startups (along with other startups in the region) today have a unique opportunity to discover a market that is very interested in them.

We should also not forget that the Gulf countries are a region that is closer to Uzbekistan not only geographically, but also mentally and culturally.

Based on this, Uzbek startups have every opportunity to enter a new fast-growing market.

Anatoly Motkin,
President of StrategEast.org