Almaty, Kazakhstan’s former capital, sits on the foothills of the Tian Shan mountain range, known for wild apples, seismic activity and – if the government has its way – an innovation hub.
Home to just under 1.5 million inhabitants, this is the cultural and financial heart of the country. The city boasts an intriguing mix of Soviet, Tsarist and post-modern architecture. It is as eclectic as its demographic: a patchwork of Russians, Kazakhs, Uyghurs, Tatars, Koreans (and others).
On a recent trip to Kazakhstan, I met with Adylzhan Khashtamov, CTO and co-founder of Kazakh start-up Aviata.kz. Adylzha, or Adil for short, is a promising tech star: young and articulate, with a Masters degree in computer technology.
Adylzhan Khashtamov, CTO and co-founder of Aviata.kz
At a café with the (seemingly entire) back catalogue of Michael Learns to Rock blaring, we spoke about the start-up scene in Kazakhstan, what he sees in the future and where his business is headed.
Only two years old, Aviata.kz is already leading the travel startup scene in Kazakhstan, turning over a revenue of US$10 million last year. It is the only OTA to have launched an iOS and Android app and to develop an integrated booking system that covers both full service and low cost carriers, a feature especially useful as Kazakhstan does not yet have direct flights to all the world’s major cities, including Singapore.
The company employs over 30 staff now, the majority of whom are female, Adil tells me, because they are “better at communication”.
The biggest challenge for start-ups, as Adil sees it, is human resources. There is great difficulty in recruiting talent – there simply aren’t enough high quality jobs to attract Ivy League graduates – and in retaining talented workers, often lured by the promise of working for tech giants like Facebook or Google abroad.
What does he believe is required to develop the startup industry? As a starting point, he would like the government to create an environment attractive to foreign investors and foreign capital. His wish list also covers tax incentives designed for growth in the R&D and tech sector – similar to Singapore – and lower corporate tax for startups.
In the near future, Aviata.kz will expand its organic growth to Indonesia. An exciting prospect but for the Jakarta traffic, he adds.
Adil, like many others in his age group, is open to any opportunities that may come his way. “Travel is not an easy business,” he admits. “There are airline regulations and our customers don’t always understand the fare rules…sometimes they think we are making it up.”
I ask if this suspicion is a hangover from the Soviet era . He nods. “It has only been 24 years since our independence.”
Expansion in China, a bordering country, is not on the cards. Adil considers it a very closed market, with far too many restrictions for foreign companies. Right now, Aviata.kz also offers railways bookings on its site, and the majority of travel between the two countries is by train.
Ascension Cathedral in Almaty
When a country is rich in natural resources, there seems little need to develop other sectors. However, Kazakhstan is waking up to the importance of diversifying its economy. In a meeting of the Almaty Business Council last month, Almaty’s Akim or mayor Bauyrzhan Baibek, along with the minister of investments and development asset Asset Issekeshev, made a series of pronouncements on the future of the city as a regional start-up hub.
“Almaty must turn into an international tourist hub,” the minister stressed.
He listed development of the Silk Road, tourist centres and affordable tourism initiatives as priorities. Development of an innovation cluster is also due to start next year.
In 1997, Almaty lost its status as capital city to Astana. 18 years later, the relocation project appears to have been a success. The new capital, with its gleaming towers and soaring monuments, is now known as the ‘Dubai of the steppe’. If this relocation plan proved anything, it is that the collective willpower of the Kazakh administration can transform a barren land into a beacon of the future.
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