KG Labs and ISOC Kyrgyzstan Meet the Mercator Fellows: A Working View of the Kyrgyz Tech Ecosystem, May 2018
On Wednesday, May 23, 2018, at Ololohaus in central Bishkek, Aziz Soltobaev and Talant Sultanov sat down with the Mercator Fellows on International Affairs cohort for an afternoon that ran longer than scheduled. Soltobaev was presenting in his role as KG Labs’ founder; Sultanov as Chair of the Internet Society’s Kyrgyz Chapter. Both had also been the co-authors of the Taza Koom national digital-transformation strategy that the Kyrgyz government was, at that point, in the early stages of trying to implement, which meant the conversation moved quickly from the kind of presentation a fellowship cohort usually gets — abstract context — to the kind they rarely get: an unvarnished briefing on what was actually working, what wasn’t, and what specific operational decisions were on the table.
The Mercator Fellowship on International Affairs, run from Germany by Stiftung Mercator, sponsors twenty-four young German-speaking professionals each year — graduates from any discipline who are committed to international affairs work. Fellows receive a monthly grant, plus support for foreign trips, conferences, and language courses; alumni form the ~400-member Netzwerk für internationale Aufgaben (nefia e.V.). The cohort visiting Bishkek was part of a structured Central Asia leg that brought them into contact with practitioners working on the digital-policy and ecosystem-development questions in countries the German policy conversation usually approaches from a distance.
The Taza Koom Briefing
Sultanov opened with the Taza Koom strategy itself. Adopted formally by the Kyrgyz government in 2017, Taza Koom set seven national goals: building world-class digital infrastructure based on green technologies and clean energy; creating a favourable environment for sustainable innovative development; ensuring digital opportunities for all alongside digital skills for the digital economy; supporting every Kyrgyzstani in becoming a digital citizen with the necessary knowledge to participate in their own governance; creating an open digital society driven by a data industry; making Kyrgyzstan a safe place to live and work online; and positioning the country as a regional hub of the digital Silk Road. Each goal had a concrete first step attached. Each also had a specific dependency — usually on regulatory change, sometimes on infrastructure procurement, sometimes on training pipelines that did not yet exist.
The Mercator Fellows were a useful audience for that briefing because they were not expected to fund anything or evaluate anyone. The presentation could be honest about the gap between strategy and execution. Sultanov was direct that several of the seven goals depended on regulatory work that was either underway or stuck — and on the fellowship cohort’s question about which of the goals was the hardest, the answer was that none of them were technically hard; the binding constraint everywhere was institutional capacity inside the relevant ministries.
Ninety-Seven Startups, Ninety-One in Bishkek
Soltobaev’s portion ran through the Kyrgyz Startup Ecosystem Database — KG Labs’ attempt to compile, by hand, the list of operating tech-adjacent companies, supporting organisations, individuals, and investors in the country. The summary in the presentation came from Seth Fearey’s October 2017 working version. As of that update, the database recorded 97 startups, 88 supporting organisations, 51 individuals worth tracking, and 19 investors active enough to count. Of the 97 companies, 91 had their headquarters in Bishkek; the remaining six were spread across Hong Kong, Kiev (two), London, Seattle, and Sydney — a small but specific diaspora of Kyrgyz-founded startups that had moved their primary operating base abroad, usually to be closer to capital or to a larger customer market.
The age distribution of the companies was the most interesting single line in the data. The oldest was founded in 2000; the youngest in 2016; average age 4.6 years. The annual founding count moved from 4 companies in 2004 to 7 in 2010, 15 in 2014, and 19 in 2016 — a steady acceleration that mapped onto the broader expansion of internet penetration and smartphone use in the country. By sector the database tilted toward e-commerce (20 companies), with media (8), entertainment (7), taxi (6), CRM, job boards, and finance (5 each) following. Stage data was thinner: only nineteen companies had any usable maturity-classification data, distributed as 3 early seed, 6 rising success, 8 notable success, and 2 fully mature. Sample valuations from public reporting put HOUSE.KG at around $300K, HATA.KG at $2.5M, and the IBOX point-of-sale company at the top of the visible distribution at roughly $80M — a single outlier that distorted the average and was instructive about what late-stage success looked like locally.
Soltobaev highlighted six specific company stories that mattered to the broader ecosystem narrative: Makeuseof (a Kyrgyz-founded technology blog that had become a top-1000 US site with around 40 million monthly visits); Kids312 (a YouTube channel for children that had accumulated 1.6 billion total views by mid-2018); B12.io (an AI-powered website-builder by another Kyrgyz founder); Socialshopwave; Picvpic, the fashion e-commerce platform run by Edil Ajibaev (who had been on the Travel & Tourism Hackathon judging panel in 2016); and Behavox, the big-data analysis company in London. Six companies do not constitute an ecosystem; what they constitute is a proof-of-concept — that a Kyrgyz technology founder could build something globally significant, and that the country had already produced more than one of them.
The Ratio That Tells the Story
The most useful diagnostic in the database was the ratio of supporting organisations to startups: 88 to 97. In a healthy ecosystem, that ratio runs the other way — there are far more operating businesses than there are organisations supporting them. The Kyrgyz figure showed exactly the inverse, and Soltobaev was direct about what it meant: too much of the country’s tech ecosystem activity in 2018 was meeting, training, hackathon-running, mentoring, conferencing, and writing strategy documents, and not enough of it was building, shipping, and selling. The supporting layer had become, in part, its own product. The presentation included a slide question that did not have an answer: which supporting organisations actually play a leadership role, as opposed to being members of the supporter category? KG Labs was openly counting itself in the audit.
The investor side of the picture was thinner still. The 19 investors in the database broke down as 10 headquartered in Bishkek, 2 in Almaty, 2 in Astana, 1 in Moscow, 2 in Kiev, and one each in Stanford and Boston — meaning that most ostensibly Kyrgyz investors were in fact Central Asian, and the truly international cap table required reaching outside the region. Investment sizes clustered in two patterns: small angel-scale checks ($1K–$50K) and a thin layer of seed and Series A activity above that, with very few growth-stage investors visible at all. The pipeline gap between angel and growth capital was visible in the data and was the gap most companies in the database had run into when they tried to scale beyond the local market.
The Discussion Afterwards
The Q&A ran nearly as long as the presentations. The Mercator Fellows worked across a wide spread of fields — public policy, journalism, development economics, climate work — and the questions split between the technical and the political. The technical ones were specific: what was the regulatory pathway for digital identity, what data protection law applied to e-commerce platforms, how were the financial-sector pieces of Taza Koom interlocking with the National Bank’s payment-system plans. The political ones cut deeper: what was the relationship between Taza Koom and the changing ruling coalitions in Bishkek, what happened to a digital-transformation strategy when the next government inherited it, what role did civil society play when state capacity was the bottleneck. The cohort left with the realistic version of the picture rather than the brochure version, and with specific KG Labs and ISOC Kyrgyzstan contacts to follow up on.
Event Details
| Date | 23 May 2018 (Wednesday) |
| Venue | Ololohaus, Bishkek |
| Hosts | Aziz Soltobaev (KG Labs Public Foundation, founder); Talant Sultanov (Chair, Internet Society — Kyrgyz Chapter; co-author of Taza Koom National Digital Transformation Strategy) |
| Audience | Mercator Fellows on International Affairs 2017–2018 cohort, programme run by Stiftung Mercator, Germany — 24 fellows annually + ~400-member nefia e.V. alumni network |
| Subjects covered | Taza Koom (7 goals + execution status); KG Labs program pillars (Build Skills / Raise Awareness / Unite Community / Promote Smart Policies); Kyrgyz Startup Ecosystem Database (97 startups, 88 supporting orgs, 51 individuals, 19 investors as of 10/2017) |
| Database snapshot (Oct 2017) | 97 startups (91 in Bishkek, 6 abroad in Hong Kong/Kiev/London/Seattle/Sydney); founded 2000–2016; average age 4.6 years; e-commerce dominant sector; sample valuations HOUSE.KG ~$300K, HATA.KG ~$2.5M, iBOX ~$80M; investors 19 (10 Bishkek, others Almaty, Astana, Moscow, Kiev, Stanford, Boston) |
