We talk to startups and investors, you get the value.
Marat Tolibayev is an international partner of investclub.vc, a Kazakh businessman and investor. He is one of those, who develop the ecosystem and the culture of venture investing in his country and actively cooperates with foreign initiatives. We had a small talk with him about what he expects from cooperation with Rocket DAO, how he works with startups and what is happening in the Kazakh ecosystem right now.
We talk to startups and investors, you get the value.
— Marat, please tell us about yourself and your past experience. What are you doing now and how you started to invest?
I started entrepreneurship when I was a student back in 1990th. We opened our first company with my partners back then. Then, for 15 years, I’ve been working in government service and in the quasi-governmental companies. Since 2014, I’ve returned to business and this is my major trade till now.
I was always into technologies and everything connected to digitalization, thus, I started doing IT-projects. I’ve launched 5–6 projects on my own, but as the rulebook says: “90% of startups — die”, so only one project survived — i-teka.kz. As of now, I steered clear from operational management and I am the chairman of the board of directors. Also, in all my new companies I come up with an idea, gather a team, invest in them and they continue working on their own. In general, I’m more into investments now, rather than in entrepreneurship.
In the last two or three years, I decided to diversify and, in addition to IT projects, I invest in traditional small and medium-sized businesses: medical centres, restaurants, hotels, food production.
Being in the investment processes, I discovered that there is a certain stratum of people with free money in Kazakhstan. They have built up capital by working for national companies or doing business, and now they want to invest in other projects for profit. These are the people I tried to bring together and created the Investors Club. Now there are about 60 people there. We exchange information, help each other, unite in pools in order to jointly invest in large projects.
— You are one of the first international partners of investclub.vc. Why did you decide to become the Club’s partner and what is the value of this partnership for you?
I see my mission in developing investment and startup ecosystems in Kazakhstan. Unfortunately, it is less developed than in Russia, Ukraine or Belarus. We need to grow to this level. this is why. I started contacting platforms and communities, trying to become partners with mutual interest. I consider it my duty to establish such connections. The more areas of common interest I find in different countries and platforms, the more choice opportunities will have investors and startups, and consequently, the bigger chance of concluding successful deals. Currently, I’m cooperating with Startup.Network, Starta Accelerator, AroundCapital and now with Rocket DAO. In the cooperation framework with Rocket DAO, I plan to raise investors from Kazakhstan into startups, which are present at this platform as well as forward Kazakh startups there, so the European investors could notice them.
investclub.vc is created for business angels and venture investors, who actively invest in startups at early stages. We regularly send startup traction reports from Rocket DAO pipeline to the Club’s participants, their reports with an evaluation of 4 major metrics (product, market, business model, team) from an analyst of a venture fund, as well as, we post announcements about the start of the fundraising. If you want to receive material from the Club, please, send us a request to email@example.com
— How can you explain the fact that Kazakh investment market is undeveloped in comparison to other countries? Perhaps, it is due to the lack of nicely-developed startups or maybe, because local investors are still not used to investing money in such a way?
There are more fundamental causes and they are more global. The market is relatively small in Kazakhstan, it is harder to make money on startups here, but in general, the economy is quite favourable. According to the statistics in Kazakhstan, per capita income is higher than in other countries but 70% of this money is petroleum-oil. The rest of the economy concludes 30%, which is precious little.
In comparison to Western European countries, we are not a democratic country, which is why such institutional concepts as legal protection of business suffer. Foreign capital comes here with caution. The state controls the economy too much, which greatly depresses the atmosphere in entrepreneurship.
— How can you estimate the development perspective of the ecosystem in Kazakhstan?
Even if we skip all the obvious problems, the ecosystem continues to develop along with the rest of the world. New investors, mentors and other ecosystem participants are constantly emerging (by the way, we’ve already talked about the startup ecosystem of Kazakhstan in this article — Startup Jedi).
I put high hopes on changes towards the democratisation of our economy and a decrease in the governmental influence — then there will be a sharp growth. I have no doubt that this will happen. This is the objective course of history.
— What should a startup be like to catch your attention? How do you usually evaluate startups, who come to you for the investments?
I can highlight four major factors: market, product, team and business model. We need to understand how prospective the chosen market is, taking into account world tendencies, geography and the industry itself. Second thing — the product. Why is it unique, how is it profitably different from the competitors and what’s his unique sales proposition. If there is a specific advantage we are interested in the project. The next factor is the team. If the team is motivated, qualified and trustworthy, then we are ready for cooperation. And finally — finances. In the business, sooner or later everything comes to money: whether a startup will make money or those are just hare-brained schemes. If all four factors are positive, we can start working with this project.
— How is your relationship developing in the future after you invest in the project?
I try to give smart money to startups. That’s not only finances but my experience, knowledge and connections with other entrepreneurs as well. Currently, there are up to 25 companies, which are connected to me by the means of investments and mentorship. For example, Zakazbuketov.kz is a flower company, which has its own network and a website. Inari is a network of restaurants styled as the dark kitchen. QazAgraFood is a manufacturer of vegetable semi-finished goods, which were the first in Kazakhstan to start producing fries. I gathered them at one platform, where we meet, communicate and share ideas.
To my mind, there are three essential competencies in any business: marketing, finance and product. In my holding, I employ specialists, who are capable of filling the knowledge gaps in startups. When we enter the project, these specialists help startups to make the first steps, enhance their knowledge in finance, marketing and product management. In such a way, I add additional value to startups. It is important not to get to the extreme and avoid becoming a manager or an employee if this startup. I always try to keep the distance and tell startuppers that this is only their project, and I’m just an assistant and advisor.
— What value can you personally add to this ecosystem and its startups by becoming a Rocket DAO partner?
I see my role in becoming a representative of this ecosystem in Kazakhstan. If our startups are willing to enter this platform or our investors have a desire to invest in one of the startups from the Rocket DAO pipeline, I will exert my every effort to connect these two markets.