Are the grant winner startups able to further develop? - Research
As is known, the State Fund for Development of Information Technologies (SFDIT) under the Ministry of Transport, Communications and High Technologies of the Republic of Azerbaijan supports startups and innovative projects in Azerbaijan.
Every year SFDIT announces grant competition for IT projects. SFDIT has announced 4 competitions so far.
Thus, the State Fund for Development of IT has allocated about 10-20K AZN grants to 90 projects so far.
SFDIT allocated this amount in order to support the projects at the initial development stage for becoming more successful and attractive for future investments.
Xeberler.az investigates the projects’ activities and prepares respective materials for readers.
Sometimes we encounter claims stating that funds allocated by SFDIT are insufficient for giving a powerful incentive to further development of startups. It’s said that projects can only cover small part of their work with allocated funds.
Taking into account all aforesaid, Xeberler.az always presents detailed information and articles on current activities of startups that received grants, investments received and existing problems.
So far we have published the following articles: “Grant winner startups: where are they and what are they doing”, “What do grant winner startups do now?”, “Do the grant winner startups work now? - Study”.
We wonder if the funds allocated by the State Fund for Development of Information Technologies assisted them during further development stage. What kind of new opportunities have they received with this support?
Here is the information about the next startups that have received grants:
“Opera” startup is one of the winner projects of the 2nd grant competition.
This project, which belongs to Kiber Ltd, has received 10K AZN.
The main goal of Opera is to develop a software that allows registering of production and commercial turnover for SMEs operating in Azerbaijan.
We spoke with Adalat Pashayev, founder of Opera.
The project manager has informed that they are currently working on selling the product.
“We have already completed the product. Presently, we negotiate with enterprises. We have now three enterprises that actively discuss the introduction of our product. By the end of this year, they will start using our product. At the initial stage, our product is considered for the local market only”.
Adalet Pashayev has noted that they were able to prepare the initial stage of the project with grant received from SFDIT. In addition, project team members invested their own finances to the project as well. That’s why the project is ready to sell now.
According to him, they currently work on the new project and plan to apply to ongoing grant competition.
We learned that they would involve young people during the next stage of Opera development
“Development of web and mobile services for GIS-based e-map of Baku” project is one of the winners of the 2nd grant competition.
This project, which belongs to Integris Ltd, has received 10K AZN
The main goal of the project is to develop GIS-based e-map of Baku and related database, and provide the population with opportunity to easily and unimpeded use this e-map through the internet resources as either a web app or mobile app.
Founder of this startup Ismet Bakhishev said to Xeberler.az that they developed and submitted the project.
“Even before applying to the Fund we used to have necessary materials for this project. Our main goal was to prepare a GIS-based e-map of Baku on both web and mobile apps. We used to have the map prepared. We just wanted to present it through web”.
According to him, since the amount allocated by SFDIT was lower than project budget they could not complete all works.
“We expected to received 30K AZN, however we received only 10K. That is why we failed to complete and present the mobile apps. Currently, we work on project’s web-page”.
Ismet Bakhishov noted that there is no enough interest to the project, and that is why they could not get any investment or assistance from anywhere.
He said that the amount received from the Fund assisted them during the initial stage and that is why they plan to apply to grant competition again.
Rent of Virtual servers VPS/VDS in Azerbaijan startup is also among the winners of the second grant competition. This startup received 10K AZN.
VPS/VDS (Virtual Private Server/ Virtual Dedicated Server) considers organization of rent services of servers based on the technology that allows establishing a few virtual machines on a physical server.
The project manager Vusal Jafarov has informed that the amount received from the Fund was much lower than project budget. That’s why the failed to complete all planned works.
We learned that after failing to be rentable VPS/VDS stopped working.
“With the money received from the Fund we were able to prepare the initial stage of project and make a presentation. After that, there was no interest to this project in the market. Therefore, we couldn’t go further and should have to stop project realization”.
Vusal Jafarov stated that it would be very good if the Fund increases the grant amount for projects.
He has also noted that he plans to apply to next year’s grant competition with a different project.
Startup.az project, directed towards creation of national base of startups in Azerbaian, is one of the winner projects of the 4th Grant Competition.
This project has received 15K AZN
Farid Kazimov is the project manager on preparation of the national base of startups.
Xeberler.az has discussed ongoing issues with project team.
Project manager has noted that grant amount directed towards technical preparation of platform, preparation of content and translation into English.
According to information, this amount was enough for initial steps within the project.
We learned that startup.az page (which is the official internet page of the Startup Azerbaijan initiative) completely updated and creation process of the National Startup Portal has been realized.
“Regarding the challenges, I can say that local startup are too lazy in sharing their information. Every project should be interested in disseminating information and involving investors. However, we see that local startups are indifferent to provide information about their activities. Anyway, I do hope that once startup.az enters the market local startups will become more active.”
According to information, the only success so far is launch of integration process of startup.az platform with Azerbaijan startup ecosystem.
Concerning the further development of project and getting huge investments, he said that taking into consideration realities in Azerbaijan, at the first stage startup.az platform should achieve self-financing level:
“We have already defined the business model. During the next stages, different services and acceleration programs can be implemented on this platform. Of course, we will need investments as well. But not too big amounts”.
We learned that project’s beta version is ready and going to be launched on startup.az domain in next 2-3 days.
Project team has noted that at this stage one of the main goals is to advance step-by-step and realize considered business models.
Project team also touched upon the proposals regarding the support to initial development of platform.
“We have got many plans and we will realize them by stages. Our main message to the startup ecosystem is that startup.az platform is launched in order to support every person and institution operating in the innovation field of Azerbaijan. This platform will serve to development of everyone”.
Event.az is one of the winner projects of the 3rd grant competition.
This project unites all information regarding all events on every topic and category within a single resource. The project has received 10K AZN.
It should be noted that the following services are also considered within Event.az: adding and organizing events, creation e-ticket system, developing Mobile App etc.
Project Manager Samir Habibli provided wide information about the project’s current activities to xeberler.az.
According to him, grant amount has supported them much during the initial development stage.
“Initial financing is very important for every project. If we are talking about the initial stage, of course this amount was very important our project”.
Project manager has noted that project team has realized the most part of considered works.
“Actually, to win a grant is already success, but not everyone can keep this success and further develop projects. We have already achieved 70-80% of all planned goals. We can call it success”.
Samir Habibli emphasized that the Fund plays significant supporting role for beginners.
“We can’t underestimate the support. Just imagine, you are 20 years old and suddenly you receive a big amount to support your project. This is a big success either for your business or for you now and in the future. You can show the Fund as a reference in order to get more investments in the future; this is also an advantage”.
According to him, Events.az portal keeps on actively working.
“In cooperation with project’s content manager we try to have every event in our website and I think that we managed to do so. We have permanent visitors and a big number of user profiles those who are interested in different events. However, big players entered the market as well. I can’t deny that we remained a bit behind them in terms of ticket sales and other matters”.
Samir Habibli also noted that he works on two global projects now and plans to apply to grant competition with them.