Leading US companies help Kazakh IT start-ups grow

ALMATY -- Kazakh information technology (IT) start-ups are taking advantage of assistance from the United States to expand their operations and grow in the wake of the Central Asian country's withdrawal from the Russian market.

A trade mission organised by the US Chamber of Commerce visited Almaty and Astana in early June, with a delegation that included representatives of more than 20 leading US companies, according to the US Embassy in Kazakhstan.

Apple, Microsoft, EPAM Systems, Google, General Electric and Mastercard were among the companies taking part in the June 6-8 mission.

The US delegation met with Kazakhstan's government to discuss ways to bolster bilateral trade and investment, and took part in a business forum jointly organised by the Kazakh Ministry of Trade and Integration.

"[US companies] are now showing interest not only in working with large companies that invest in the oil and gas industry but also in developing manufacturing, machine building, the IT industry and infrastructure," Kazakh Minister of National Economy Alibek Kuantyrov said at the forum's conclusion.

"Of course, they're seeing the frenetic growth of the IT industry in our country," he added, noting that Kazakhstan has its own 'unicorns' (companies valued at over $1 billion) and that financial technology (fintech) is "expanding actively".

"I think we can co-operate with them very closely, especially since their products are used widely in Kazakhstan," he said. "We met with Google, and we'll be discussing some issues with them in detail."

Start-up acceleration

Kazakhstan has a long history of hosting US companies, which are in turn helping local companies develop and improve their operations.

Microsoft is planning to build a multi-provincial hub in Kazakhstan to stimulate Kazakh digital exports and train IT specialists, Bizmedia.kz reported in June.

Google also has expressed interest in enhanced co-operation with Kazakhstan following its withdrawal from the Russian market, a Google spokesperson said in the report.

Kazakhstan is the first -- and still the only -- Central Asian country in which Google for Startups launched its Silkway Accelerator programme. Astana Hub, an IT start-up technology park, is Google's Kazakh partner in this venture.

The Silkway Accelerator got up and running in July 2022, and recruiting is under way for fledgling start-ups to join the fourth cohort of the programme.

TrustContract was selected to join the third cohort of the Silkway Accelerator in March, company CEO Chingiz Dauletbayev said, and completed the three-month training in late June.

"During our time in the accelerator we achieved good results: our revenue doubled, and so did our customer base," he told Caravanserai. "We now work with 400 companies. We're growing very fast."

During the programme, mentors and experts came in every week and led two or three workshops for all the teams. "Traction meetings" were held on Saturdays to discuss results and the testing of hypotheses.

Topics of discussion included "how to work with a team, how to initiate marketing activity in order to gain customers, how to build sales and how to enter foreign markets", Dauletbayev said.

The specific legal and cultural characteristics of those markets also were addressed, he added.

How 'unicorns' grow

Kid Security also took part in the third cohort of the Silkway Accelerator, with the company's chief marketing officer Assat Ashamanov saying the Google programme taught him how to rally his team around a common goal.

"In the past, the company departments were on their own, but now we've brought them into step with each other," Ashamanov told Caravanserai. "We meet twice a week to report on what we've done and what we'll be doing."

"This programme is important for us because we're interested in meeting investors in the United States, doing market research and studying the practices of American companies that are like ours."

"We'd like to understand how 'unicorns' grow," he added, pointing to Apple's prodigious market capitalisation.

The tech firm's $3 trillion valuation is 15 times Kazakhstan's gross domestic product (GDP) of approximately $200 billion.

Garderob CEO Dias Nurlanov told Caravanserai he went into the accelerator hoping to learn how to scale his business beyond Kazakhstan's borders.

"During the workshops, we were told about management ... and financial models with a path to new markets," he said.

"The programme organisers also invited representatives from venture funds, who went through our presentations with us and gave us feedback."

"If you don't have up-to-date knowledge that's relevant to your business specifically, you'll lose your investment," Nurlanov said. "But if you know how to build a product and negotiate with customers and investors, even if you have no capital, it will come."

"We're going through an investment round right now, and it's much easier than it was before we did the programme."

Beyond Kazakh borders

Astana Hub, the largest international technology park for IT start-ups in Central Asia, has been working closely with the United States.

"We're trying to learn a lot from leading companies and institutions in the United States, we're borrowing practices, and we regularly visit Silicon Valley," Astana Hub CEO Magzhan Madiyev told Caravanserai.

"That led to the start of our co-operation with Google for Startups," he said.

In addition, Madiyev teamed up with Draper University in San Mateo, California, to start a programme for Central Asian start-ups to get involved in Silicon Valley.

"On top of that, we have many other collaborations in the works. So naturally we're pleased when officials and representatives of US organisations come here and visit Astana Hub," Madiyev said.

"We have a very close co-operation, and this is just the beginning -- we'll be deepening it."

The United States is the global leader in technology and venture capital, so all start-ups try to register there, said Dauletbayev, whose company TrustContract is registered in the US state of Delaware.

Kazakh developers often go abroad because the salaries in Kazakhstan are lower than in Europe and the West, he noted, blaming the Eurasian Economic Union (EEU or EAEU), a Russia-dominated economic bloc that includes Kazakhstan.

Integration with Russia has negatively affected Kazakhstan, said Dauletbayev.

"Before we joined the EEU [in 2015], Kazakhstan's economic growth was 7% to 8% a year, and Russia's was 3% to 4%. Russia's economy is big, so Kazakhstan's small economy adapts to it," he said.

"That has played a role in the weakening of the tengem" he said. "There was no manufacturing in Kazakhstan, and there isn't any now."

"The only thing we have at our disposal to interest the world is developed innovations and technologies, but for that we need skilled programmers," he added.