Tencent Holdings Ltd. and VR Capital Group have led an equity funding round of nearly US$70 million in Uzum, valuing the Uzbek fintech and ecommerce firm at around US$1.5 billion.

FinSight Ventures also joined the round, according to a statement from Uzum.

Based in Uzbekistan, Uzum offers services ranging from digital banking and ecommerce to food delivery in Central Asia’s most populous country.

More than 40% of Uzbekistan’s adults do not have access to formal financial services, according to the company.

This funding follows Uzum’s previous US$114 million raise last year through a series A funding round and debt financing, which made it Uzbekistan’s first unicorn.

The investment marks one of Tencent’s first in Central Asia amid broader Chinese interest in the region.

🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ Central Asia emerges as a legitimate venture capital destination

Uzum’s $65.5 million funding round reflects a broader shift in Central Asia’s investment landscape that has gained significant momentum recently.

Uzbekistan’s venture capital investments doubled in 2023, with Uzum becoming the region’s first unicorn 1. This growth is part of a wider Central Asian trend, with Kazakhstan leading the region through a sixfold increase in venture capital deals since 2018 1.

The involvement of major international players like Tencent signals that Central Asian startups are now competing for the same caliber of investors that typically focus on Silicon Valley or Southeast Asian companies.

This represents a notable evolution from just a few years ago when Central Asia was largely overlooked by global venture capital, suggesting the region has reached a critical mass of investment-worthy opportunities.

2️⃣ Physical infrastructure becomes a competitive moat in digital businesses

Uzum’s decision to build extensive physical infrastructure from scratch, including 112,000 square meters of logistics capacity and over 1,500 pickup points across 450 cities, demonstrates how frontier market success often requires hybrid digital-physical approaches.

This infrastructure-heavy strategy contrasts with purely digital approaches that work in mature markets but may struggle in regions where last-mile delivery and financial infrastructure remain underdeveloped.