There Would Have Been No Facebook without Venture Capital Investments

Foreign experts within Astana Economic Forum held in Nur-Sultan shared their experience in the field of venture investments and told why this industry promises a great future, despite the uncertainty of the projects invested in it.

Five well-known foreign experts were brought together by “Baiterek” National Managing Holding” JSC which organized a panel session devoted to the discussion of the role of the Government in the development of venture capital”. This is a new direction for Kazakhstan, which now should be taken for granted, - believes the Managing Director of the Holding, Adil Nurgorzhin.

- Venture investments are quite a specific tool. These are high-risk investments, and their development takes a long time. But there would have been no new industries without them. There would have been no Internet, Facebook, Silicon Valley and so on. We even have no choice whether to participate in this process or not. We must participate in order to keep up. We have already fallen behind, and our task is to find niches that can be quickly caught up. Again, the focus is made on the basic economic sectors: mining and metallurgy, oil refining, and the use of all possible technologies for deep processing in the agrarian sector. Only technologically advanced solutions can be effective. And this cannot be done without the venture capital industry. The question is how quickly and effectively it shall be done, - said Adil Nurgozhin.

According to him, Kazakhstan is interested in the experience of working with venture capital in the countries of South-East Asia, since they started developing this industry relatively recently, whilst this process has been maintained in the USA for 60 years now.

- Let's cooperate with those who successfully do it now. The experience is very similar, the level of manufacturability is not so far from us, but at the same time they have steep markets. Within a 1.5 hour flight radius from Singapore, there are 650 million people, whose economies are growing by 6-9% and will continue growing in the same way. We are willing to try entering these markets with our solutions, with our start-ups and somehow get connected, - he added.

The words of the Kazakhstani colleague were confirmed by the Executive Director of the National Investment Agency of Thailand, Pun-Arj Chairatana. He stressed out that the pace of innovative technologies and products emergence in the world directly depends on the level of the venture capital industry development, which in its turn forms a healthy investment climate.

- The venture capital market was established in Thailand about two decades ago, same as in many leading developing countries of Asia. Over the past five years, the capital and investment market in Thailand has become one of the most active sectors associated with start-ups and the international acquisition of companies with high potential, - Pun-Arj Chairatana noted.

The other speaker, Deputy Director General, Edwin Chow has been working to ensure that Singapore remains the place of innovative start-ups growth. Its number has increased by more than 30% over the past five years. The number of venture capital transactions has also increased significantly.

- This is due to several factors: a favorable environment for business, the rule of law, logistical connections. There are another three important factors: entrepreneurial talent, appetite for risk in the private sector (business angels, venture capital) and patience. Singapore is fortunate to have a number of world-class universities willing to invest in business-aimed students. (...) Our government has increased investment in such programs by supporting other Singaporean universities and polytechnic colleges that conduct similar programs around the world. This will ensure the stable operation of Singapore's technology entrepreneurs, - said Edwin Chow, adding at the same time that as soon as there is a stream of talents, “smart money” will follow them.

Meanwhile, based on the successful international experience, Kazakhstan is taking an important step towards the development of its innovation ecosystem and international competitiveness by launching the first venture fund of funds, QazTech Ventures JSC. It will focus on the development of the venture capital investment market, technology consulting, and the development of a business incubators system.

It should be noted that more than 200 people took part in the almost two-hour panel session.

Astana Economic Forum is being held in Nur-Sultan for the 12th time. This year, its topic is “Inspiring Growth: People, Cities, Economies”. Experts, businessmen, politicians and scientists from 74 countries of the world have arrived in the capital of Kazakhstan, and the number of delegates has exceeded five thousand people.

Within the framework of this forum, Baiterek Holding will hold another panel session of “The Role of the Government in the Establishment of the Modern Affordable Housing Ecosystem”, which will be held on May 17 at Hilton Astana Hotel.

Reference:

“Baiterek” National Managing Holding” JSC was established in accordance with the Decree of the President of the Republic of Kazakhstan dated May 22, 2013. The key institution of the Government of the Republic of Kazakhstan that complies with the advanced standards of corporate governance and ensures the implementation of the objectives for the sustainable development of the economy of Kazakhstan through its diversification, support for innovation, export development, increase in labor productivity. The Holding includes: Development Bank of Kazakhstan JSC, Investment Fund of Kazakhstan JSC, Zhilstroisberbank of Kazakhstan (HCSBK) JSC, Kazakhstan Mortgage Company MO JSC, KazakhExport EIC JSC, Damu EDF JSC, QazTech Ventures JSC, Housing Construction Guarantee Fund JSC, Kazyna Capital Management JSC, Baiterek Development JSC, Kazakhstan Project Preparation Fund LLP.