Building abroad does not have to mean leaving us behind

Samir Hajibayli, a venture capitalist based in Baku, shares his perspective on global markets, startups, and investment trends in his regular column for The Tech.

In his previous article, he explored market trends and founder control. In the new column, he reflects on his recent trip to Istanbul, why founders build businesses abroad, and how countries in Central Asia and the Caucasus can maintain strong ties with successful companies and talent from the region.

Samir Hajibayli, Baku city, VC, LinkedIn  

Last week, 19-25 October, I was in Istanbul meeting partners and friends and attending two events. There were plenty of familiar faces, and I found myself asking the questions I usually ask whenever I visit: How are things going? What are you seeing now that you were not seeing a year ago?

The most interesting pattern was a change in where investors were looking.

Listening to people with years of experience investing in early-stage startups, I kept hearing about Turkish-origin founders building businesses outside Türkiye. The connection to the country still mattered. But the customers, the capital, and the ambition were increasingly international.

That sounded familiar. It has been part of our fund’s thesis since 2024. Coming from a small market, we understood that the outcomes we were targeting would often require our founders to build for markets much bigger than their own. Our research comparing local and diaspora fundraising reinforced that view.

Hearing similar thinking in Istanbul made me reconsider something. Perhaps this is not only a small-country problem. Perhaps it is about the distance between where talent is born and where that talent can find its biggest opportunity.

A large country is not necessarily a large market for your product

Türkiye has an advantage that many countries in the Caucasus do not: a substantial domestic consumer market. For some businesses, that creates room to build, test, and grow before expanding abroad.

But a large population does not automatically create a large market for every kind of company.

If you are selling enterprise software or an AI service that takes over part of a company’s work, what matters is not simply how many people live nearby. It is how many businesses have the problem, the budget, and the willingness to trust a new supplier.

You can build a product from almost anywhere. Understanding why a customer will pay for it is harder from a distance.

That is why I would not say the competitive advantage exists only in Silicon Valley or one other hub. Talent and valuable businesses exist well beyond them. But access to major buyers, experienced operators, and investors is still uneven. For an early-stage founder, being close to those networks can shorten years of trial and error.

My impression from Istanbul was that the investment activity still falls short of the potential I see there. That is an observation from conversations, not a claim that every Turkish investor has adopted the same strategy. But the financial environment helps explain the caution.

On October 22, Türkiye’s central bank reduced its policy rate from 37% to 36%. That is an easing step, but it is hardly cheap money.

A startup does not necessarily borrow at the policy rate, and venture capital does not move mechanically with it. Still, expensive money changes the alternatives available to investors and the decisions made by customers. A business watching its financing costs closely may postpone the software contract that a young startup desperately needs.

The founder can execute well and still spend months fighting conditions they did not create.

Capital needs more than a good story

Another development helps put those conversations into perspective.

On October 15, just before this column’s week, MSCI froze certain changes to its Türkiye equity indexes, citing concerns about market integrity and ownership transparency. Türkiye remains an emerging market. MSCI said it could consider a consultation on a downgrade to frontier or standalone status if sufficient progress is not evident by June 2027. 

This is a public-market issue, not a direct judgment on Turkish startups. But I think it illustrates a wider point: capital does not only ask how much it might earn. It asks whether it can understand what it owns, trust the rules, and eventually get its money out.

We spend a lot of time in our region talking about attracting investment.

Usually that conversation starts with talent, incentives, or the next technology park. Those things matter. But so do the less exciting questions about contracts, shareholder rights, reporting, and predictable decisions.

A founder may choose a foreign company structure without rejecting their home country. They may simply be removing questions that would otherwise make every investment conversation longer.

That is something we should understand before describing every company built abroad as a loss.

Kazakhstan is showing what can come back

While I was thinking about founders looking outward, Central Asia was receiving attention from the other direction.

On October 19, US Secretary of State Marco Rubio met Central Asian counterparts in Samarkand, accompanied by a substantial American business delegation. Then, on October 23, Jensen Huang visited Kazakhstan and met President Kassym-Jomart Tokayev.

These are not interchangeable visits, and neither guarantees lasting investment. But together they suggest that the region is becoming more visible to people making consequential commercial decisions.

For me, the most interesting connection was Higgsfield. During Huang’s visit, the company announced new investments from NVIDIA and TCV. It is headquartered in San Francisco, has a Kazakh co-founder, and has a major engineering presence in Kazakhstan. 

We should be careful about the story we tell here. A globally built company with Kazakh roots is not proof that Kazakhstan’s domestic ecosystem alone produced its success. Equally, it would be wrong to dismiss its local contribution because its headquarters are abroad.

The useful question is what happens now.

Higgsfield’s co-founder has described a growing team in Kazakhstan, including people who returned from abroad to work there. That is a more meaningful connection than putting a successful company’s logo on a national presentation.

People working inside a fast-growing global company learn things that are difficult to acquire through conferences or startup courses. They see how products are shipped, how international customers behave, how teams hire, and how decisions change when a business grows.

Some may eventually start companies of their own. Others may become early employees, mentors, or investors. None of this is automatic. But it is how one company can become more valuable to an ecosystem than its direct employment numbers suggest.

One success does not create a mature ecosystem. It can, however, change what the next generation believes is possible and give them people to call when they try.

What should we take from this

For Azerbaijan and our neighbours, I see two responsibilities that should sit together.

We should help founders reach the markets where their businesses have the best chance of succeeding. And we should make it worthwhile for those businesses to maintain meaningful connections at home.

That means more than asking founders to return permanently. It could mean building an engineering team here, hiring graduates, backing a local founder, or introducing a regional company to its first international customer.

Resource wealth can help finance this process. But I would be careful about calling money “cheap” simply because a country has natural resources. National wealth does not automatically become accessible capital for a young company.

The opportunity is to turn some of that wealth into patient investment, useful skills, and institutions that outlast the next commodity cycle. The danger is spending it on visible projects without creating reasons for talented people and good businesses to stay connected.

Nor should reducing dependence mean turning inward. A startup selling to several international markets may be more resilient than one depending on a handful of domestic customers. The goal is not to avoid the outside world. It is to participate in it on stronger terms.

I left Istanbul thinking that we may be asking the wrong question when we ask whether our best founders will leave.

Some will. Some will need to.

The more useful question is whether we are building a place they will want to keep building with.