Mongolia, a developing country with an economy mostly driven by its rich natural resources (especially copper, coal and gold), has been on a steady incline in recent years, despite the fact that it continues to experience and have to deal with a fair few challenges.
Indeed, the country’s economy is very much dependent on mining – it accounts for a significant portion of Mongolia’s GDP, government revenue and exports – and as a result of this, the economy is very sensitive to global commodity prices. Thus, Mongolia’s overall economy tends to fluctuate based on demand for these resources.
In addition to mining, agriculture is another large and important sector. With a rich history and tradition of herding and livestock production, it’s no surprise that livestock farming contributes significantly to both exports and domestic consumption.
In terms of GDP, Mongolia ranks quite low on the global economic scale. According to World Bank Data, Mongolia has a GDP of about $16 billion, placing outside of the top 100 economies in the world. Having said that, however, the economy has seen consistently steady growth in recent years, with a higher GDP per capita than many other developing countries in similar positions.
In addition, there’s also been a concerted effort to diversify the Mongolian economy to move beyond just mining, with more effort to increase investments in sectors like renewable energy, technology and tourism. However, actually properly implementing economic diversification is difficult, especially since Mongolia is landlocked with limited infrastructure and a small population.
What Does That Mean for Mongolia’s Startup Ecosystem?
Naturally, with an economy that isn’t particularly strong nor super weak, Mongolia doesn’t exactly boast an environment that is great for startups, per se. However, in the context of developing countries, it actually shows tremendous promise as Mongolia seems to be embracing entrepreneurship and innovation.
Despite the fact that it has a small market (especially relative to its neighbours), Mongolia has a young, tech-savvy population with a rising interest in digital solutions which has laid a solid foundation for startup growth.
A few key sectors in Mongolia’s startup ecosystem include fintech, agritech, renewable energy and e-commerce, which very accurately reflects the country’s strengths as well as its unique economic needs and natural resources.
The Mongolian government has made a concerted effort nd taken important steps to foster the entrepreneurial ecosystem, including things like creating incubators and accelerators, offering tax incentives to startups and supporting digital literacy programmes.
Furthermore, many organisations, both local and international, have provided support, including the Mongolian National Startup Fund as well as other international accelerators. This has given Mongolian entrepreneurs access to funding mentorship and resources.
Mongolia’s location, between Russia and China, has also created some opportunities for cross-border trade and partnerships.
Unicorns in Mongolia
As of October 2024, there Mongolia hasn’t yet produced a unicorn – that is, a privately owed company that is valued at over $1 billion. However, that isn’t necessarily surprising given the fact that the country has a small economy, population and GDP.
Of course, just because no Mongolian businesses have achieved unicorn status just yet doesn’t mean that there won’t be any in the future. In fact, if the country follows its current trajectory, it’s likely that we’ll start to see a few companies surpassing the $1 billion mark.
Here are a two Mongolian startups that are on our unicorn radar.
- AND.Global: AND.Global was established in 2015 and is the operator of a digital fintech company that provides affordable financing options. The company uses a machine-learning-based system to assess data points from information regarding income, expense records, banking, education, social media, employment history and more to determine credit limits, allowing them to provide customers with personalised offerings.
- Intel Mind: Intelmind is a company that works towards helping build and invest in Mongolian tech companies. Having developed 18 different businesses across a broad range of industries, the firm has clearly demonstrated is commitment to pioneering technological solutions. Intelmind was founded in 2016 and is based in Ulaanbaatar.
So, while Mongolia doesn’t currently have any unicorns to speak of, it seems likely that within the next few years, billion-dollar companies will begin to emerge, and whether it’s one of the above companies or a surprise entry, it won’t be long before Mongolia is able to announce its first-ever unicorn.
