The development of the venture market ecosystem was discussed at Digital Bridge

On October 12-13, Digital Bridge 2023, the largest IT forum in Central Asia, was held in the capital of Kazakhstan.  Traditionally, the forum began with a plenary session with the participation of the Head of State Kassym-Jomart Tokayev, where he noted the need to develop the venture capital market as the most important driving force of innovation and technological progress.

"It is important to attract international players to our venture capital market. We need their competence and high-quality expertise of projects. Domestic institutional investors, including the national holding "Baiterek", may become key partners. In addition, it is necessary to develop mechanisms and tools to ensure participation in venture funds of various financial institutions – second-tier banks, insurance companies, microfinance organizations and other players," the Head of State said. 

Within the framework of the forum, the Private company BGlobal Ventures LTD together with Qazaqstan Investment Corporation JSC with the support of the Ministry of Digital Development, Innovation and Aerospace Industry of Kazakhstan (hereinafter - MDDIAI RK) held a round table on the topic: "The joint role of institutional investors in the development of the regional venture market".

The round table was attended by representatives of government agencies, international organizations and local institutional investors: MDDIAI RK, Qazaqstan Investment Corporation JSC, the World Bank, the European Bank for Reconstruction and Development, the Eurasian Development Bank, the International Finance Corporation (IFC), the US Agency for International Development, MOST Ventures, Kazakhstan Investment Development Fund, and United Nations Children's Fund (UNICEF).

The purpose of the event is to bring together key institutional investors for joint work aimed at the development of venture financing in Kazakhstan and Central Eurasia.

During the discussion, the First Vice-Minister of the MDDIAI RK Kanysh Tuleushin presented an overview of the innovation ecosystem, noting that the Government of Kazakhstan pays special attention to supporting the technology industry, including through the formation of a venture ecosystem. He also spoke about the successful implementation of the project "Stimulating Productive Innovation", funded by the World Bank, under which the Tumar Venture Fund was launched in January 2023.

In turn, the Permanent Representative of the World Bank in Kazakhstan and Turkmenistan Andrey Mikhnev thanked the MDDIAI RK for fruitful cooperation and assured that the Bank intends to continue work on the introduction of effective instruments for the development of venture financing in Kazakhstan and announced a number of current and planned initiatives in this direction.

Chairman of the Board of Qazaqstan Investment Corporation, Ainur Kuatova noted that venture investments play a key role in stimulating innovation and accelerating the country's economic growth.

"In most deals with startups today, the preseeding and seeding stages prevail. In this regard, QIC intends to participate in venture funds with a mandate to invest in the postseeding period and at the stage of project entry/scaling into new markets. This will give an impetus to the development of the ecosystem of the venture market, which means that it will lead to increased competition in the market, improve the quality and innovation of products and services and, as a result, provoke demand abroad, which will increase the export of Kazakhstani IT products to international markets," A. Kuatova  emphasized.

The results of the Star Venture program, through which more than 550 high-potential companies were supported at an early stage in Kazakhstan and the world, were reported by Huseyin Ozhan, Head of the EBRD for Kazakhstan.

Stephen Orr, USAID Coordinator in Kazakhstan, noted in his speech that the implementation of the USAID entrepreneurship and business environment development project contributes to the growth of economic activity in Central Asia, and also stressed that it is necessary to stimulate the private market through improving the legislative framework, dialogue between the public and private sectors, as well as analysis and application of the best international practices.

The importance of financing projects with a social agenda was reflected in her report by Laetitia Bazzi-Veil, Acting Representative of UNICEF in Kazakhstan. She spoke about the UNICEF venture fund, which has been investing in social startups for more than 10 years to support local companies and entrepreneurs applying innovations for the well-being of children. In Kazakhstan, through the UNICEF country office, the foundation supported the establishment of two platforms as a digital public good for children – "Accessible Kazakhstan" and "Ozim".   

The presentation by Alisher Abdrakhmanov, Investment officer and representative of the global IFC Startup Catalyst team, was devoted to the role and experience of IFC in the development of technological ecosystems in developing countries, as well as a wide range of support tools provided by the organization. He spoke in detail about the new venture investment platform, under which US$ 225 million will be invested in technology startups in Africa, the Middle East, Pakistan and Central Asia over three years. In turn, IFC Startup Catalyst invests in seed funds, accelerators and incubators of emerging markets, and in the near future plans to finalize the first investment in a venture fund focused on Central Asia.

Deputy Chairman of the Board of the Eurasian Development Bank, Tigran Sargsyan, during his speech, spoke in detail about the activities of the Digital Initiatives Fund of the Eurasian Development Bank (Fund, EDB FCI), about successful examples of the implementation of digital integration projects by the Fund, such as "Traveling without COVID-19", awarded with the ADFIAP award, and having no analogues in the world of the application "Work in the EAEU", about the key areas of its work and the main financing tools used by the EDB FCI.

Summarizing, the moderator of the round table - CEO of BGlobal Ventures, Abay Absamet thanked the participants of the session for a meaningful conversation and suggested holding such meetings on a regular basis:

"BGlobal Ventures, whose mission is to develop the venture capital investment market in Kazakhstan and the Eurasian region, initiated and organized this session. Today's discussion clearly showed that Kazakhstan's potential in the further development of the venture capital ecosystem is very high. I especially want to emphasize the support and assistance of the MDDIAI RK and the Astana Hub International Technopark in the formation of a local innovation and venture ecosystem. I am confident that the global experience of international financial organizations, combined with QIC support tools, will contribute to the sustainable and dynamic formation of the venture ecosystem of the entire region."