How Startups Are Born and Grow: The EasyTap Case

The founder of the service talks about his path into business and working with venture investors

The startup and venture market reflects the overall development of a country's economy. Where it develops, new innovative companies emerge, offering citizens and other businesses previously unavailable services that make their lives better.

This applies to Kazakhstan as well. According to open sources, while in 2018 the volume of public venture deals in the country was about $7 million, by 2022 it had grown to $35 million, a fivefold increase. Over this period, many startups have appeared in the country and have already become familiar services for Kazakhstanis. One of them is EasyTap, an online service for booking hourly workers for stores and restaurants. Using this startup as a case study, we explain how people come into business and raise investment to develop their projects.

From business to employment and back to business

The co-founder and CEO of the online service EasyTap is Magzum Tolesh, a native of Kostanay. The service helps companies bring in staff when they need extra workers during peak hours or when someone has quit. People, in turn, can earn extra money at times convenient for them without having to put aside, for example, their studies. Today the company works with 65 brands in 15 cities of Kazakhstan, and more than 120,000 people are registered in the system.

“I should start by saying that my path can be described as ‘business – employment – business – employment – startup.’ In general, I have been an entrepreneur since childhood, if a buy-and-sell scheme can be called entrepreneurship. I remember how hard it was for my parents in the 1990s. That is when I developed the mindset: ‘if you want to survive, you have to keep moving.’ Already at school I started earning some money by organizing paid school discos, reselling copied discs and selling cheat sheets,” says Magzum Tolesh.

He also set up a business of his own while studying at university. According to Magzum, he saw that students constantly turned to laptop repair services because of viruses spread via USB flash drives. Their laptops often needed repairs, and seeing the long queues at service centers, the entrepreneur put up notices around the dormitory saying that he repaired computers.

“All in all, I had to do a lot of different things. I launched a photo and video studio that operated right up until the pandemic and generated passive income. After graduating, I shot weddings. But I felt that I needed to get a permanent job, and I did not see anything I had done before as a real business. So I took a job as assistant to the head of student affairs at Kostanay State University. It was my first management experience, where I learned to find the right approach to people,” says the founder.

Alongside his permanent job, our hero shot weddings in the evenings to pay for his younger brothers' education. This went on for some time until, in 2017, he traveled to Europe, where a turning point in his thinking came.

“After living in Europe, I realized that the problems are only in your head. Everyone who lives well and seems out of reach is actually just as ordinary a person. You simply need to step even further out of your comfort zone. As a result, in the summer of 2017 I returned to Kazakhstan and, together with a partner, opened an education center that prepared schoolchildren for university admission and exams,” Magzum continues.

The business grew rapidly, and the partners even began selling a franchise to operate in Astana. In December 2017, the entrepreneurs saw a new opportunity to develop their business: scaling via the internet. But this required investment, so they decided to go to Almaty, the largest hub of the venture industry in Kazakhstan.

First steps in startups

Magzum and his business partner had no general idea of how startups work or how to raise investment, but they decided to go to Almaty and “put together something like a business plan on the fly.”

Thanks to their social connections, they managed to reach a startup founder who had just recently raised investment for Startup Finder. The partners planned to learn from him what needed to be done to attract investment, and how.

“He had received investment from venture investor Marat Tolibayev, and I decided to message Marat directly on Facebook to say that we were building an online education startup. I was very surprised when he replied right away. I remember that we were sitting in a doner shop, connected to the internet and started talking with Marat. Yes, we did not have a business plan, and Marat declined to invest, but he offered to become our mentor, and if everything worked out, he could become our business angel,” Magzum says of his first encounter with the venture market.

Indeed, they did not manage to raise investment, but at that moment, our hero says, he was inspired by the trip to Almaty and decided to move there from Kostanay. After the move, he worked in a wide variety of industries and companies, even including the oil and gas and agricultural sectors, to build social capital. For example, at the end of 2019 he and one of his partners started a business selling hair oil from India.

In the end, however, he decided to take a permanent job. Recruiters from Chocofamily approached Magzum, and he eventually rose to the position of commercial director of the food delivery service Chocofood.

While working there, he spotted a niche in 15-minute grocery delivery: such services were already operating in the West and in Russia. As a result, they launched an MVP (minimum viable product, i.e. a service with minimal but sufficient features for the first customers) and began offering the service directly to residents of apartment buildings via shared chats. This happened in January 2020, shortly before the start of the COVID pandemic and the related lockdown restrictions. It was during this period that the service began to show rapid growth, and they decided to raise investment to develop it. Venture investors declined, but the idea caught the interest of the Chocofood holding itself. That is how the now successfully growing project “Ryadom” was born.

By the autumn of 2020, Magzum had decided that he should leave his job, which he did in January 2021. It was after this that he set out on the path to launching EasyTap, a startup that now operates successfully in the labor market.

Identifying and solving the problem

While still working at Chocofood, Magzum identified a problem: frontline staff in the service sector have high turnover. In other words, companies constantly have to look for new workers because previous ones frequently quit. This gave rise to the idea of a startup that would solve exactly this problem.

With this startup, Magzum joined the MOST acceleration program, and once again turned to Activat VC for investment.

“The Activat VC team asked a lot of the right questions and, it seemed, tore our project to pieces. But back then Marat Tolibayev believed not so much in our business as in me. And the company agreed to the first tranche. It was a large sum for those times, and it gave us the opportunity to work on the project and test various hypotheses,” says Magzum.

But by August 2021 the money was running out, and there was still no clear result. However, the entrepreneur decided not to stop, and by September the final vision of EasyTap in its current form had taken shape, and on November 24, 2021, the first person took on a side job through the service.

At first, the project team tried introducing chatbots and considered referral programs and gamification. One problem was obvious – staff turnover – and it had to be solved. The solution was found in the business of outsourcing agencies, which supplied companies with temporary workers.

This process had not been digitized, and they decided to take exactly this path. To do so, the founder went to Moscow to study the processes of a startup already operating in this field. To test the new version of the product, they needed a large client, such as a supermarket chain.

“Before flying to Almaty, I called an acquaintance from the venture industry and asked him to help me reach Azamat Osmanov, the head of the Magnum supermarket chain. He promised to arrange it within the next few weeks. And then a miracle happens! Right there, at the airport, I run into Azamat Osmanov by chance,” says Magzum.

As a result, a meeting was organized with the chain's management, where a first agreement was reached and KPIs were set for the project. This was followed by fundraising on the venture market, and with that funding EasyTap was launched as a full-fledged service.

The company became a pioneer of the side-job market, and that market is growing fast. Today the service is used by more than 65 brands in Kazakhstan and Kyrgyzstan, such as Sportmaster, Adidas, KFC, Food Solutions (ex-McD), Zara and others, and over 120,000 people have registered. The core audience of the service is students, but the team is working on expanding its reach.

“My partner Temirlan Kabylbekov and I started the project as a duo in a coffee shop and worked there for several months, and now the team has more than 20 people,” adds Magzum.

Investors are an important part of a startup

Magzum Tolesh and his team arrived at the project idea by testing many different hypotheses, which revealed a market problem. The EasyTap startup became its solution. However, an important part of the success was venture investment, which made it possible to launch the startup and drive its growth.

Trust and mutual understanding are important in a relationship with an investor.

“The most interesting thing is that Activat VC legally invested in another company of ours, the one that worked on the previous version of the project. But when we re-registered as a new company with a new product, I had no doubt at all that Activat VC's earlier investment would be carried over to EasyTap,” says Magzum.

Later, other private investors also believed in the project: Yelzhan Kushekbayev and Talgat Ismail. This was followed by investment rounds from business angel Murat Abdrakhmanov, MOST Ventures, Timur Turlov and others. All of these investments helped the EasyTap startup grow.

Magzum Tolesh is confident that the venture market in Kazakhstan is developing successfully and that it has “grown significantly thanks to all the players,” from education and the digitalization of public services to venture capitalists and startup founders themselves.

“We are growing it together, and I believe that in Kazakhstan it is the IT industry and the venture sector that are well developed. The proof is the amounts of investment that startups receive,” the entrepreneur says.

Indeed, while 5–10 years ago the venture market in Kazakhstan was small and non-public, today, with the development of startup hub and incubator infrastructure and the emergence of a large number of startups, it has started to grow rapidly.

For example, the study “Venture Capital Market Overview in Kazakhstan” by MOST Holding, White Hill Capital and AIFC Tech Hub states that the total volume of deals on our country's venture market from 2018 to 2022 was approximately $87 million. These are figures for public deals, but in practice the market may exceed $140 million.

Its players include both individual funds and private investors. Together with startups, they contribute to the emergence of new companies in Kazakhstan that improve the lives of citizens and businesses.