Baku, November 12, Tamilla Mammadova, AZERTAC

In recent years, Azerbaijan has made impressive strides in developing its startup ecosystem and is increasingly establishing itself on the regional venture capital market map. The emergence of players such as Caucasus Ventures, SABAH Fund, and others demonstrates the formation of a robust infrastructure for innovation and investment. A growing number of international experts are noting the rising quality of Azerbaijani startups and the high level of professionalism of local investors.

AZERTAC presents an exclusive interview with Marat Tolybay, a Kazakhstani venture capitalist and founder of Activat VC, a fund operating throughout Central Asia and the Caucasus.

- Your company, Activat VC, invests in startups across Central Asia and the Caucasus, and you regularly take part in the region’s key venture events. You see the big picture. Could you tell us if there is an informal ranking of the most advanced countries in venture development? And where does Azerbaijan stand in it?

- Right now, Kazakhstan is the undisputed leader of the venture market in the region. According to KPMG, in 2024 around 100 million USD were invested in startups, and more than 70% of that amount went to Kazakhstan.

That’s quite natural — the venture movement in our country started earlier. Today, Kazakhstan has over 20 private venture funds, around five angel clubs, and more than 1,500 officially registered startups.

At the same time, I should note that Azerbaijan has made remarkable progress in recent years. I can feel it myself — by the quality of events held here and by the growing maturity of startups that participate in them and appear on our radar.

- How do you see Azerbaijan’s prospects in this area? Does the country have the potential to become a venture capital hub?

- Yes, absolutely. Over the past five or six years, Azerbaijan has made impressive strides. Major players such as Caucasus Ventures, SABAH Fund, and others have already entered the market — that’s a clear sign of growth and ambition.

- What steps would you recommend to Azerbaijani corporations, venture funds, and startups themselves to take in order to develop the country’s venture ecosystem?

- In Kazakhstan, digitalization has been a national priority for many years. As early as two decades ago, the government digitized nearly all core databases — citizens, legal entities, real estate, vehicles, and so on. Later, this digital foundation made it possible to integrate public data with private banks while maintaining confidentiality. As a result, Kazakh citizens can now use any banking app not only for payments and shopping, but also to access government services — all in one place.

Today, digital transformation is entering a new phase. Kazakhstan has announced a three-year transition toward becoming a “Digital State.” This work focuses on several key areas. The first is technical infrastructure, including expanded energy capacity to support massive computing needs. In particular, Kazakhstan is now preparing to build one or two high-capacity nuclear power plants.

The second technological driver is computing power. Recently, Kazakhstan launched its first data center with an NVIDIA supercomputer, and several artificial intelligence centers are being opened in partnership with global companies such as OpenAI, Telegram, and others.

The next crucial element is human capital. Kazakhstan plans to include “Artificial Intelligence” as a school subject so children can learn about AI from an early age. The state Bolashak program, which sends hundreds of young people to study at the world's best universities each year, will also continue. In addition, branches of the best foreign universities are actively opening in our country.

The government has also worked hard to nurture a new class of young IT entrepreneurs. The Astana Hub accelerator was created for this purpose — a powerful ecosystem with offices, computing resources, and even dormitories for visiting founders. Later, similar hubs were launched in all regional centers, and Astana Hub helped establish outposts for Kazakh startups in major global markets — San Francisco, Dubai, and Shanghai among them.

Another essential factor is regulation. Kazakhstan established the Astana International Financial Centre (AIFC), offering preferential legal and tax regimes for tech and financial companies. And finally — funding. Until recently, most Kazakh startups relied on private investment. But in 2025, the government made a landmark decision to create a Fund of Funds worth 1 billion USD to support local startups through venture capital funds. All these measures have helped Kazakhstan build a strong digital industry and become the regional leader in venture development.

- Do you see Azerbaijan as a competitor to Kazakhstan in the venture market of Central Asia and the Caucasus — or rather as a partner?

- First of all, I want to say that I personally don’t see competition as something negative. On the contrary, I believe that open and friendly competition is a healthy and essential part of any market economy. We can compete without harming each other — learning from one another’s best practices, getting inspired by each other’s success, and pushing ourselves to grow faster.

Secondly, I believe that all five Central Asian and three Caucasus republics are part of one shared market. We are united by a common history and a similar mentality, which makes it much easier for us to cooperate with each other than with distant foreign markets.

Besides, the domestic market of each of our countries is still too small to grow “unicorns” on its own. That’s why we all need to blur internal borders, allow technologies and capital to move freely, consider startups from neighboring countries as our own, and invest in one another’s projects.

- What needs to be done to achieve that?

- Founders from, say, Uzbekistan or Azerbaijan should be able to freely join incubators and accelerators in Kazakhstan. Likewise, Kazakh and Azerbaijani investors should look beyond their own countries and invest, for example, in Kyrgyz, Uzbek, or Tajik startups. Venture funds from different republics should join forces to create regional funds and co-invest across borders. Government agencies should exchange experience and data — and even establish joint funds of funds.

We also need official delegations, private venture funds, and startups from all our countries to attend each other’s forums. This kind of interaction will naturally lead to deeper integration, collaboration, and the formation of a unified regional ecosystem. And in fact, much of this is already happening. For example, at the Baku ID Forum this October, a new joint venture fund was announced — between Azerbaijan’s Innovation and Digital Development Agency and Kazakhstan’s White Hill Capital.

Another great example: the Uzbek accelerator IT Park recently invited the head of Kazakhstan’s Astana Hub to join its Supervisory Board, so he can share his expertise in evaluating and supporting startups. IT Park has also helped establish joint hubs representing both Kazakhstan and Uzbekistan in San Francisco and Shanghai. These are excellent examples of how cooperation is already taking shape in our region.

- How does your company, Activat VC, engage with the regional venture market — and Azerbaijan in particular? Do you already have Azerbaijani startups in your portfolio? How do you collaborate with local venture funds?

- Yes, of course. As I mentioned earlier, we view all five Central Asian and three Caucasus countries as one common market. And we have very strong ties with Azerbaijan in particular. We regularly attend forums in Baku, closely follow the local startup scene, and have already invested in two Azerbaijani startups — ePoint and Glorri. Both are growing rapidly and successfully entering neighboring markets.

We also maintain excellent relationships with Azerbaijani venture funds — we exchange information, share promising startups with each other, and explore opportunities for joint investments. And we plan to continue this close cooperation with Azerbaijani investors and startups in the future.