After operating for just three years, Uzbekistan’s first fintech unicorn Uzum has increased its valuation again, rising to $1.5bn after a recent $65.5m funding round.
The funding round was co-led by China’s Tencent and VR Capital, with backing from FinSight Capital, who led Uzum’s first equity round in March 2024. The post-money valuation of $1.5bn is a 30% increase from its previous $1.16bn valuation.
Uzum reached unicorn status following its March 2024 funding round. The fintech firm has since acquired more than 17 million users in Uzbekistan and 16,000 merchants.
“In just two years, Uzum has built the most comprehensive digital ecosystem in Uzbekistan,” said Djasur Djumaev, CEO and Founder of Uzum.
“Today, we’re reshaping how people shop, pay, and manage money. This new round of funding empowers us to deepen our fintech offerings and expand our leadership in digital banking and lending.”
Uzbekistan’s emerging fintech market
Able to leverage trading routes in both Europe and Asia, Uzbekistan is quietly emerging as a fintech market undergoing rapid digital transformation.
Point-of-sale (POS) terminal payments saw a 50% increase from 2021-2023 in Uzbekistan, from a total of 10,593 to 21,651, according to data from KPMG. These findings indicate a growth in digital payments across the country, despite cash remaining the most popular payment method.
Uzum, recognising a growing appetite for digital payments, launched Uzum Bank, a digital bank which offers a range of services, including Visa co-branded debit cards with pre-approved credit limits, commission-free bank transfers, microloans and buy now, pay later (BNPL) options.
“Uzum embodies a unique confluence of a proven business model and first-mover advantage in a structurally underserved market,” said Richard Deitz, Founder and President of VR Capital.
“We are deeply impressed by the quality of the team and the remarkable progress the Company has achieved to date. It is our privilege to support Uzum’s continued growth through our investment.”
Speaking to TechCrunch earlier this year, the bank explained its mission to find opportunities within Uzbekistan’s burgeoning digital landscape. Within the interview, Djumaev attributed local expertise and market knowledge as core components to the business’ success.
“Betting on local expertise and infrastructure in frontier markets gives you an advantage to then perform and scale your business very fast,” he said.
This rise in digital payment adoption has coincided with the surge of 20-59-year-olds receiving greater access to the internet and in turn, mobile payment functionality.
KPMG found the average price of 1GB of internet dramatically dropped by 89% from $3.27 in 2019, to $0.30 in 2023. This greater opening to internet access has enabled customers to migrate to digital banks like Uzum as part of the country’s ‘Digital Uzbekistan – 2030 Project’.
Government Backing
Under Uzbekistan President Shavkat Mirziyoyev’s leadership, the government has focused on meeting the same digital trends many Western countries have adopted in recent years, such as mobile and alternative digital payment methods.
But in order to achieve this, the country has been working to increase its broadband coverage. The government plans for 100% coverage of all households in the country to have access to a mobile broadband service by 2025.
If every household in Uzbekistan is able to connect to a broadband network, this could see another surge in digital payments and access to digital banking services like Uzum’s.
As part of the Digital Uzbekistan – 2030 Project, the government will mandate that all of its fees and fines are carried out via online payment services. In order to achieve this, the government kickstarted the project in 2019 by introducing new payment systems and encouraging market competitiveness.
In 2022, the government made a political decree for merchant operators to be connected to at least one online cash register with the objective to provide choice at POS terminals.
The Uzbek government also laid out standards for foreign investment for its homegrown companies. The government’s national action strategy enabled foreign investment from state-owned banks for the first time.
This then followed new provisions set in place in 2023, which stated foreign investors looking to 100% acquire an Uzbek payment service provider, first must have a minimum of $400,000 in charter capital.
China’s influence
Tencent’s participation in Uzum’s latest $65.5m funding round also reflects China’s growing economic influence in Uzbekistan, where it is now the country’s largest investor and second-largest trading partner, with bilateral trade reaching $14bn in 2024.
The investment marks Tencent’s first major fintech move in Central Asia and comes as over 3,400 Chinese companies now operate in the country, according to the Chinese government.
As Uzbekistan advances its ‘Digital Uzbekistan – 2030’ strategy, foreign capital from Chinese firms like Tencent is not only accelerating innovation in digital banking and payments, but also highlighting how the country’s digital transformation is becoming increasingly shaped by regional power dynamics.
