Arman Abdrasilov: We will invest 1.5 billion tenge to support innovators
Head of the "Zerde" Holding on the development of the domestic IT sector

Most managers of domestic IT companies and founders of startups complain about difficulties with financing. Bank lending is not available for them due to the lack of the necessary collateral. In order to increase the access of participants in the ICT sector, "Zerde" National Infocommunication Holding plans to invest at least 30% of available funds or 1 billion tenge in companies in this area. Arman Abdrasilov, Chairman of the Board of “Zerde” Holding told about this in an interview with the correspondent of "Capital.kz ".

- Arman, under what terms are you ready to invest in IT projects?

- The Holding is considering various options for investing in ICT projects, including through participation in venture funds, as well as financing SMEs through the acquisition of shares in the company's capital with its obligation to subsequently repurchase. This also includes co-financing of transactions in the ICT sector by attracting 50% of funds from private investors and 50% from the Holding, partnership with business on the PPP model.

-Financing what kind of startups are you interested in?

- The main criteria for selecting projects are regional or global expansion potential, an experienced team, the presence of co-investors and syndicated rounds. In particular, it is planned to finance projects in the field of Smart city, Fintech, Govtech and Edtech.

- Tell us about your immediate plans for building and managing your investment portfolio.

By expanding the ICT market, we will invest available funds in market players. This will allow us to grow with the market. It is very important to reduce our dependence on budget sources of financing and increase the profitability of the Holding's services. We plan to increase the value of assets by optimizing and entering foreign markets. Our KPIs in these areas will increase the annual profitability of PPP and syndicated projects to 30% by 2030, bring revenue from cloud services to 50%, and the market capitalization of “NITEC” JSC should grow to $1 billion by the same term. As part of the formation of the investment portfolio until 2023, we will create an investment fund together with the private sector with a total volume of at least $25 million. At the same time, we will increase the share of investments from net profit to 30%. As a result, by 2030, the return on our investments should be at least 10%.

As for the Astana Hub, within the framework of this direction, we will promote the emergence of several domestic IT companies with a capitalization of more than $1 billion by 2030. In addition, we intend to increase the volume of investments in startups up to $200 million and increase the volume of exports of IT products and services up to $1 billion by the same term.

- You mentioned your plans to enter foreign markets. What Kazakh technologies can be of interest to the world today?

- "Sergek” is a successful project that we would like to export to the countries of South-East Asia, Africa and Latin America. The value is not in the video cameras themselves, but in the ready-made software. There are no such systems in 170 countries around the world. We want to export e-government technologies. We have reviewed 50 projects, and we plan to review up to 250 projects by the end of the year.

- The share of Kazakhstan's IT developments in the global market is less than one percent. How to compete with Israel and other global leaders in the field of the latest technologies?

- In fact, our specialists are no worse than the Israeli ones. We are able to compete. The problem is only in the management system of companies and in the ability to conduct business. Israel knows how to pack and sell its product. We also want to achieve this. Our market is focused on domestic consumption and government orders. This led to a certain deformation.

- Does it make sense to talk about high-quality provision of electronic services when the country still has real problems with Internet access?

- Public services do not mean the availability of the Internet only. It's about the quality of the service. Kazakhstan ranks 30th in the global e-government ranking. The country is ranked the 10th place in the provision of electronic services. There are problems with the Internet. But despite the fact that somewhere there is no Internet, public services do not get worse.

- In fact, many existing electronic public services remain complex and inconvenient for citizens.

- The e-government portal is the property of the state. We can't interfere here. We see work on the transfer of the eGov.kz portal is placed in the trust management of the Holding, and then we have the right to invest our own funds in it and improve its performance, including the quality of service.

- Support for entrepreneurship in the ICT sector is part of “Zerde”'s plans for the next 10 years. What real support are we talking about? What business entities can expect to get investment?

- According to the new strategy of the Holding, direct investments will be made in the corporate sector, as well as in subjects and projects of SMEs. The holding is ready to participate with a share in the capital of companies, co-finance projects, and develop cooperation on the PPP model.

- Among other things, you plan to allocate more than 1 billion tenge in the form of grants for innovators, which will help launch at least 10 technological ecosystems. What projects are we talking about?

- We are talking about financial investments in promising projects, commercialization of technologies in support of corporate innovations. In total, in 2021, we will invest 1.5 billion tenge in the form of grants to support innovators in the country. These measures will allow гы to launch at least 10 technological ecosystems (for example, SmartCity, Govtech, Fintech, AI). We will be able to create up to 10 thousand jobs, increase the share of innovation-active enterprises by 2 times and the share of innovative products in the country's economy by 3 times by 2025.

- The authorities of Kazakhstan are actively implementing standards of the "Smart City" in Nur-Sultan and Almaty. What new smart technologies are being considered for implementation next year?

-Work on the Safe City project will continue in Nur-Sultan. Video surveillance cameras will cover courtyards, social facilities, and park areas. About 10 thousand new video surveillance cameras will be installed. In the field of land relations, work is underway to create a geoinformation portal. It is planned to digitize underground networks, visualize 3D urban networks, effectively plan development and determine functional zoning. These measures will automate the provision of public services and significantly reduce corruption risks, reduce time and labor costs of citizens.

In Almaty, it is planned to install another 360 video cameras to the existing hardware and software complex "Sergek". Work will continue on installation of intelligent household metering devices of apartment buildings. In addition, within the framework of geoinformation systems, it is planned to digitize engineering networks.