The founder of the IMAN startup on participating in Seedstars, raising over $10 million in investments, and expanding into new markets

Founder of IMAN startup on participating in Seedstars, raising over $10 million in investments, and expanding into new markets

Rustam Rakhmatulloh, 27 years old, CEO & Founder of IMAN,

How It All Started

In 2018, I worked as a financial analyst at the investment fund IFG Capital. I was responsible for building financial and investment models. At that time, we faced the task of acquiring one of the banks. Then, my colleagues—Mark, a former investment banker from the US, and Igor, a former Goldman Sachs banker from Austria—and I studied about thirty business models in the microfinance and banking sectors, including Islamic banks.

We discovered that Islamic banking is underdeveloped globally. Everyone talks about it, but few understand its essence. There is no strong global player on the market that can provide a competent solution and explain the core principles of this sector.

About the Project

The goal of IMAN is to create an interest-free society for people through ethical financial products. The community adheres to eco-friendly and Sharia-compliant business activities.

IMAN consists of:

— the IMAN Invest invest-tech application, through which people can invest and earn up to 30% annual profit;

— the IMAN Pay fintech application, through which people purchase goods and services on installment, funded by IMAN Invest investors.

These two products operate in accordance with AAOIFI Islamic finance standards.

The goal of IMAN products is to promote a culture of interest-free, conscious finance to society, thereby increasing people's wealth.

Today, we have raised over $10 million in investments from ten venture capital funds from the US, France, Singapore, Uzbekistan, Kazakhstan, Tajikistan, and other countries. More than 10,000 retail investors have invested their money through the IMAN Invest app. Over 500 branches use the IMAN Pay installment application. We operate in all 12 regions of Uzbekistan, and the number of IMAN service users exceeds 200,000.

About Raising Investments

Raising investments is a correct company strategy, evaluated by client growth, as well as a harmoniously organized fundraising and investor relations process. This is continuous work where every department must operate like a machine, following its processes and set goals.

Experience working at international audit and investment companies such as the World Bank, IFG, and EY helped correctly structure the fundraising strategy and processes with my partners: CFO Mark Zubov, CPO Bobir Nurmuhammedov, and COO Akhmadzhon Hamidov.

The main stages of the investment attraction process:

— building an MVP (Minimum Viable Product);

— attracting reputable angel investors;

— continuous search for qualified professionals in key areas;

— building Product 2.0;

— closing the investment opportunity for angel investors to focus on the business;

— attracting investment funds for Product 3.0, scaling the team, investing in marketing, obtaining a banking license, and expanding into new markets.

Researching global experience is one of our key principles. We constantly study how companies operate, for example, those from Silicon Valley, and strive to implement their practices in our market. This is convenient: there is no need to reinvent the wheel regarding legislation, investment contracts, corporate governance, and other legal matters.

Trust and proper management of corporate documentation under English law are key to building correct relationships with investors.

What Participation in Seedstars Provided

Seedstars is a Swiss investment fund that allocated $100,000 in investments to us in 2020. At that time, we entered the top 5 best projects in the world. This pleased our team, and local media reported that a startup from Uzbekistan had reached the Seedstars finals for the first time.

However, participation in the competition did not affect the attraction of major investors. At this stage, Uzbekistan is of little interest to venture capital funds. When there is an opportunity to invest in Silicon Valley, Israeli founders, Europe, MENA, SEA, LATAM, and Africa, with high growth potential and easy scalability to neighboring regions, attracting investor attention and capital for a startup from Uzbekistan is not easy.

Every member of our team knows that we need to be ten times better and stronger than any startup from America, Israel, or Europe to achieve global success in our region.

Small "shots" like participating in the Seedstars World Competition mean almost nothing to the global community of large investment funds.

About Scaling to Other Markets

We plan to open the first Islamic bank in Kazakhstan in 2023. Next—Pakistan, Bangladesh, Saudi Arabia. After that—Southeast Asia, the Middle East, and North Africa, possibly India and Europe.

We need to "feel out" and seek partners: banks with licenses, telecoms with large databases, large holding companies with GR influence, and retailers with a large branch network for the installment product.

We select new markets by building a network in that country through communication, field research, and macro-research on key metrics such as: penetration of credit and Islamic finance, presence of the target audience, market opacity, potential number of sellers, and retail investors.

The main thing needed for scaling, both abroad and domestically, is a ready team and established processes. We have both and are constantly improving them:

— a team oriented toward global markets, motivated to think and work on a large scale. These are people who want to show and prove to the whole world that Uzbekistan is a super-underestimated country in terms of highly educated minds, businesses, and technologies;

— processes implemented by the team, constantly improving. They are structured in such a way that the business can be replicated not only in 20 countries but also in 100+, adapting it to local mentality and laws.

Recommendations

Less theory

Study the market less theoretically through desk research. Knowledge of the top 10 market metrics is sufficient.

Networking is the key to success

Communicate more with the local community of entrepreneurs to find investor partners or key stakeholders for your business. M&A (mergers and acquisitions) is a good option, especially if there are strong players in the market.

Build community first

If you do not have initial contacts in the market for effective networking, try to start the business by building a basic community to test the product and market without launching and large investments. Holding small offline events, online activities with the audience, participating as a speaker at events—anything, the main thing is to test.