BILLZ is an online sales management tool targeted at small and medium-sized businesses. Today Billz covers about 5-10% of the market in its country, and this year the project entered the Kazakhstan market. We spoke to co-founder Rustam Khamdamov to find out where to get your first startup experience, why it is advantageous to become a resident of the IT Park in Uzbekistan, and what conditions let foreign funds invest in Central Eurasian startups.
Startup founders see the main problem of small and medium-sized retail companies as the lack of tools to effectively manage and scale their business. Also, according to the developers, many retailers who are used to operating offline lack the digital skills to set up an online shop on their own.
Billz offers three relevant solutions: assistance in managing shop processes and operations; assistance in selling goods and services – the platform provides an online shop with ready-made tools and the ability to integrate with local marketplaces; and financial assistance in business development from a partner bank. As the platform can provide the bank with more data on the retailer, the bank is more willing to grant loans and instalments.
— How did you develop the idea of the project in the beginning? Did you go through any incubation or acceleration programmes?
We did not go through any such programmes. In spite of the fact that we are one of the first residents of the IT Park, their programmes for startups only appeared in 2020, which was already too late for us. Instead, we looked for other opportunities: for example, we went through a startup school from YCombinator. Any entrepreneur can take part in the startup school, since it takes place online. It was the coolest experience. We watched all the video lectures, and created a profile in YC to record our traction there and communicate with other funders. Apart from this school, we took an online course on how to launch your own startup from Stanford. Their programme consists 50/50 of theory and practice: we knew how to conduct customer development, how to create an MVP – everything a budding startup needs to know.
— Why is it beneficial to become a technopark resident in Uzbekistan?
First, in 2018, we became members of the MUIC centre. A year later, there was a restructuring there, and an IT Park appeared, of which we became residents right away. Thanks to the special tax regime, our sorts pay 7.5% income tax instead of 12%. We are also exempt from paying taxes on funds. IT Park introduces us to investors and helps us in every way possible. And this only costs us 1% of monthly revenue.
— What advantages do you see in entering the Kazakhstan market?
The purpose of registering our company in Kazakhstan was to attract serious investors in order to expand in the developing markets of CIS and Southeast Asia and the MENA countries. We had the opportunity to open a company in Kazakhstan with the support of Venture Rockets, a separate division of AIFC (Astana International Financial Centre), operating under English law. They helped us with advice on how to approach investors and we also participated in their Venture Days.
Most of the major financial centres operate on English law case law: New York, Toronto, London, Hong Kong, and Singapore. The MFCA is also among them. This type of jurisdiction provides protection for investors and their trust, which is beneficial for the development of the startup industry as a whole.
— How useful was it for you to participate in our Venture Day last year?
We set up networking with several investors, but last year they were not yet interested in our project because we were at an early stage. The investors, on the other hand, wanted to see MRR at least $100,000.
— Which venture funds have you already cooperated with and when do you plan to open the next round?
The first fund to invest $150,000 in us was the British Sturgeon Capital. It works with startups in emerging markets, and we were the first startup in Uzbekistan that they invested in. The seed round helped us close by the same fund, offering another $150,000, as well as Singapore-based Quest Ventures, from which we received $500,000. We closed that round in May 2022, and we plan to open the next one in November.
We cannot yet say how much investment we need. It will all depend on which markets we will scale into. We want to grow faster and build a non-local business. For that, we need emerging markets with a GDP of $300bn or more and with relatively little competition.