Kaspi.kz：哈萨克斯坦超级应用——[Business Breakdowns，第203期]

I'm Zack Fuss, and today we're breaking down Kaspi.kz, a leading financial technology company based in Kazakhstan, best known for its super app. Kaspi.kz plays a central role in the lives of millions of Kazakh citizens by offering a seamless ecosystem that combines payments and digital wallets, e-commerce, and financial services. Its success is often attributed to its ability to solve pain points specific to the Kazakh market, such as low financial inclusion and limited access to traditional banking infrastructure.

This approach has made Kaspi.kz not just a technology company, but an integral part of the country's economic fabric. To truly appreciate the story of Kaspi.kz, you must also learn the story of Kazakhstan: a country of 20 million people with a GDP of $260 billion. The country is rich in natural resources, as one of the world's largest producers of uranium and a significant producer of oil. As a member of OPEC+, it also notably shares a border with both China and Russia.

To break down Kaspi.kz, I'm joined by the company's CEO and co-founder, Mikhail Lomtadze. Over the past 23 years, Mikhail has helped transform Kaspi.kz from a small, traditional retail bank into the dominant platform it is today. He ultimately brought Kaspi.kz public on the London Stock Exchange in 2020 and, more recently, listed the business on the Nasdaq exchange in the United States.

In this conversation, we will explore how Kaspi.kz achieved its dominant market position, its innovative approach to combining e-commerce, digital payments, and financial services, and the critical role it plays in the region. We'll also discuss the unique challenges of building a super app in an emerging market, how Kaspi.kz differentiates itself from the global tech giants, and the company's ambitions to expand its footprint beyond its current borders.

Despite its somewhat unsung existence as a public company, Kaspi.kz is a business today facilitating nearly $80 billion in payment volumes, with 13.4 million monthly active users, an e-commerce marketplace with $10 billion in GMV, and a financial services business originating $20 billion in financing volume. It notably does all of this profitably, with its bottom line growing at a 20% clip.

I'm so happy today to be joined by Mikhail, who is the co-founder and CEO of what is probably the largest company many North American investors may have never heard of. Despite its most recent listing, it's a $20 billion market-cap fintech super-app business called Kaspi.kz. I thought to kick things off, Mikhail, it would be very helpful to learn more about you and your history with the business that you've now been involved with since 2007. We'll kick things off there, and I appreciate you coming on.

Thank you for having me. I'm the CEO and co-founder of Kaspi.kz, which is one of the largest fintech companies listed on Nasdaq. We're at about a $20 billion market cap, and quite a lot of people throw around this super-app terminology. But Kaspi.kz itself is one of the most unique mobile apps in the world, with an extremely wide range of different services, from e-commerce and grocery to travel and government services, payments, and fintech financial services.

The whole business model has actually been validated and developed over the course of the years. We started from financial services back in 2007 and 2008, and for a couple of years we built what was probably the best financial services business in Kazakhstan. Then we went into payments, followed by e-commerce, travel, grocery, B2B payments, government services, and everything is in the app.

Kazakhstan is a country of about 20 million people. The monthly active users of our app are a bit over 14 million. Out of our monthly users, 67% visit our app daily, which makes Kaspi.kz probably the second-most-engaged app in the world after WeChat. Pretty much the whole life of our users is in our app, and we're extremely proud of the quality of the services we provide to both merchants and consumers.

Importantly, we listed on Nasdaq in January of this year. We're targeting net income in excess of $2 billion this year, with a growth rate of about 25%.

Later in the conversation we'll go into your decision to list in the United States, but I'm curious to learn more. You grew up in a country of fewer than 4 million people, and now you're running what is one of the most financially successful fintech super-app businesses in the world. How did you go from Georgia to running and owning this business?

I'm from Georgia—the country in the Caucasus, not the U.S. state. I built a consulting and IT company there when I was a student in business college. I left for Harvard Business School in 2000, and my company became part of Ernst & Young, which is now a leading auditing firm in the country and the region.

After HBS, I couldn't really imagine myself working in a big corporate setting, consulting, or investment banking. I really wanted to run a business and build something truly exceptional. As a result, I decided to go into venture capital and private equity, which is the closest industry you can get to actually running a business. Even though you're not running it on a daily basis, you are building the business together with entrepreneurs and the management teams of your portfolio companies.

I went to the former Soviet Union region and joined Baring Vostok Private Equity, the largest private equity firm in the region, which was behind some of the most exciting companies, including technology companies. I became a partner briefly after joining the firm, and then we made an investment in Kazakhstan in one of the traditional banks. It was pretty much a top-10 or top-15 bank at that time.

Then, in 2007, the crisis came, and the banking sector faced significant challenges across the region. Roughly a third of the banking sector went bust because it depended heavily on wholesale funding from capital markets, and that funding really dried up. Because it was the biggest investment of the fund at that time, I decided to step in together with my partner and today's co-founder of Kaspi.kz, with the support of the managing partner and founder of Baring Vostok, my colleague Vyacheslav Kim, who is a co-founder of Kaspi.kz. We decided to go ahead and step in, and this is how we started to build up Kaspi.kz.

I feel it's impossible for our audience to really appreciate the breadth and depth of your services and the strength of your economic model without understanding the country in which you operate. Perhaps you can set the stage. I think you told us there are 20 million people and that you have 14 million monthly active users. What drives the economy? How big is it, and where are the growth vectors?

Kazakhstan is a very dynamic country. As we discussed, it has about 20 million people and a GDP of more than $260 billion, with roughly $14,000 of GDP per capita. On the one hand, it's one of the resource-rich countries in the world, with some of the largest deposits of oil, gas, uranium, copper, and so on. It's a really impressive table of all the natural resources the country has.

On the other hand, it's huge in terms of territory. It's one country the size of several European countries combined. President Tokayev is very focused on promoting and building a modern Kazakhstan, and the digital and innovation agenda has been very important.

As a result, when you're talking about digital reforms and innovations touching every part of citizens' lives, the transformation in Kazakhstan from a cash economy to a cashless economy has been mind-blowing. If you take the perspective of 2016, plus or minus a year, the penetration of cashless transactions was maybe around 10% to 15%. Basically, 85% to 90% of transactions were in cash. Now it's totally opposite: about 90% of all transactions are cashless, people rarely carry cash in their pockets, and transactions flow through mobile applications. Kaspi.kz has been driving this change.

The transformation in government services is also remarkable. Consumers can issue a driver's license from their mobile phone, file a marriage application, and get birth certificates for their children. They have digital documents, including their passport and driver's license, in the mobile application. They can register a business, register a car, or change car ownership. I can basically sell you a car in Kazakhstan while having coffee with you in the evening—we can change the ownership directly in the mobile application.

This has been a success because the government is focused on innovation and believes in technology. It has enabled companies like Kaspi.kz to work together with the government to make those services accessible to the regular population. There is a wide range of government services available through mobile applications.

Unfortunately, when I talk about Kaspi.kz, it's a big company listed on Nasdaq at around a $20 billion market cap, with around $2 billion in net income. We believe we still deserve a bigger valuation, but one disadvantage we have compared with many other companies is that investors use Apple products, order on Amazon, and can experience the products and companies in which they invest.

Kaspi.kz is a company in Kazakhstan, and most of our investors have not really used our products. That's the disadvantage we have, but we're working hard to explain our business model and the business in general to our investors.

Absolutely. I know we'll talk about it later, but the decision to list in the United States and broaden the audience's ability to understand and appreciate what you've built will hopefully drive that story home.

Now that we have a sense of where you came from and the country you're operating in, obviously in 2007 the business was a middling bank. Today it has a breadth and range of services that are pretty incredible on a global scale. How did you evolve from a financial institution into a technology company and introduce all the services you now offer your customers?

The foundation of our business is really the mission we've formulated: to improve people's lives by developing world-class mobile services. When we were initially developing the business, everybody was talking about how banks would be challenged by tech companies, how banks would die, and so on. I'm not a banker myself, and none of the people on our team are bankers, so we were always intrigued by building a great company that improves people's lives—not a great bank or whatever.

In our mission, we don't mention any industry or specific service, because we go into every vertical where we feel we can make a difference: improve people's lives by making services faster, cheaper, and more convenient, with a world-class user experience, design, and data behind it.

We said, "We're in financial services because that's where we started, but why can't we become a tech company? Why can't we launch mobile services?" Therefore, we started our first business. The first platform we built was payments, which includes a huge range of different services, from QR payments and P2P payments like Venmo and Cash App to B2B payments for merchants.

Then we went into e-commerce. We started with electronics predominantly, but now we have pretty much everything. We're like the Amazon of Kazakhstan, in the sense that we have a wide range of services across different verticals, deliver across the country, and are growing really fast.

Then we entered travel. We're almost like Booking.com, where consumers can buy airline tickets, railway tickets, and so on. Every business we entered was new to us, and that was our competitive advantage. We were looking to do things completely differently and didn't have the weight of experience on our shoulders when coming up with different ways of building those businesses and designing the user experience.

Then we entered another big vertical, e-grocery, and now we're the largest e-grocery company in the market, growing almost 100% year over year. It's also profitable, which is quite unique by global standards. In just 12 months, this business was already net-income positive for our company.

On top of developing consumer-facing services through the mobile application, we also developed a mobile app for merchants. If you ask me what one of the most important decisions was, apart from the mission and really focusing on quality of services, it was the desire to become more than just a financial-services company and actually become a tech company—a super app.

At the time when we were developing the super-app idea, most companies around the world were strong believers in single-purpose mobile applications. We said that our consumers don't need to download multiple mobile apps. They would enjoy having a single login that gives them seamless access to all the services. It could be one application and one brand, by the way, because it's Kaspi.kz.

Everybody said we were crazy because people weren't going to do a savings account and buy kitchen accessories through the same brand. There were also technological challenges around developing a single mobile application. But at that time we said our mission was to improve people's lives and make users' lives easier, not our own lives easier. We had to solve this. We had to develop a super app because that's the best way for consumers to access our services.

I think that was probably the most important business-model decision we made.

You now have these 3 pillars of your business: payments, marketplace, and fintech. I guess government services are an adjacency and perhaps a quasi-fourth pillar. You've highlighted a very wide range of services, and the pushback would be: How do you do everything in such an exceptional manner?

I'm curious, when you think about the makeup of your team and how you implement all these incredible services, how are you able to effectively develop and launch all these different products?

The foundation of our success, and probably the most important factor, is really the culture we've developed. It starts with our mission statement. Most companies make these statements, but that statement is usually on the wall in the office and isn't actually incorporated into the company's everyday work.

In the case of Kaspi.kz, we're guided by this principle. On the one hand, the mission is to improve people's lives, but we also measure every aspect of our business. We wanted to measure how successfully we implement our mission.

One of the measurements we decided to use in our daily work is the net promoter score. We wanted to measure whether our mission was being achieved. Because it's a super-app business model, one service relates to another, and they support each other. As a result, we had to measure the happiness of our consumers, which is why we decided to use the net promoter score.

The net promoter score gives us the ability to measure whether our consumers' lives are better with our products than without them. We ask a simple question: whether they would recommend the service to their friends or family. Then we get their evaluation.

Most importantly, we took this to another extreme. Companies measure their net promoter score and use it as a marketing statement, rather than actually being guided by it. In our case, we're organized around the products. We're essentially a product company, and every product has a directly responsible individual and a directly responsible team.

We research or ask roughly half a million consumers every month. Those consumers give us feedback about why they love the product, why they don't like it, and what they would like us to improve. If we get feedback that a consumer is looking for improvements, we call the consumer back and ask them to explain in their own words what they would like us to improve.

Our product teams then listen to those calls and come up with what we call a product release: a limited number of simple features that improve the product based on consumer feedback. These are the actual calls from consumers, in their own simple words. It's not smart business terminology or technology language.

Because we're organized around products and directly responsible individuals and teams, those teams have full responsibility for exciting the consumer. This is how we're achieving it. Some of our products have unimaginable net promoter scores. Some of our e-commerce services, for example, have a net promoter score of 90.

If the net promoter score is negative—which happened only once in our history—that means we're not improving consumers' lives. Therefore, we either have to drastically change the product or kill it.

The best example of how we made this decision was a credit card we had more than 10 years ago. The credit card had a negative net promoter score. It represented about a third of our business and contributed a couple hundred million dollars to our net income, but we decided to kill the product. We called this "bad money." We weren't improving our consumers' lives, and the product didn't have a chance of becoming a positive-net-promoter-score product.

This is an example of how we make decisions by being guided by the mission and the quality of our products. If you came into the Kaspi.kz environment and sat in on product meetings, you would realize the extreme to which we have taken consumer feedback. This fuels our never-ending waves of innovation. Every year, we end up with up to 3 new businesses, basically.

I'd love to spend a little bit of time on each of the verticals to educate our audience on what exactly they mean. Take your payments business as an example. Can you illustrate how your consumers and businesses interact with your app to facilitate payments?

The foundation of our payments business is the payment network, along with P2P payments, bill payments, and B2B payments. P2P payments are very similar to Cash App or Venmo in the United States. We've built an incredible functionality where consumers can transfer money to friends and family commission-free, and the money hits the account instantly. This has been a driver of mobile payments and digitalization, as well as the transition from a cash to a cashless society.

The second foundational product, or service, is our payment network. It's simple—it's like Apple Pay, for example. Our consumers go to a store, restaurant, or other merchant, open our mobile app, scan the QR code, and make the payment.

The biggest difference from many other payment services is that we're a closed loop. We control the entire value experience, from the merchant to the consumer or from the consumer to the merchant. Both are our customers, they have accounts, and the money moves within our system.

When we built this business, we priced it at the cheapest rates on the market, compared with intermediated payment networks like Visa and Mastercard. We're now the leading payment network in the market.

B2B payments were a service we developed with convenience stores in mind. Coca-Cola or another supplier would bring goods to the convenience store, and the person in the store—a cashier or manager—could settle the invoices for those deliveries seamlessly.

Now we're launching a range of B2B services around this functionality to simplify things. We're effectively becoming Cash App, Venmo, Visa, Mastercard, a payments platform, and an invoice-settlement platform for both merchants and consumers. We're targeting the ability to move money freely, with minimum barriers, between consumers and merchants.

If you think about building your stack of commerce, you start with payments. You facilitate peer-to-peer payments and the ability to buy in physical locations, and then you introduce the marketplace business, which I believe is largely third-party—much like Amazon in the United States or Alibaba in China.

You have 8 million monthly active users on the marketplace, which I believe is the fastest-growing of the platforms. You introduce innovative products like e-grocery and travel, and I believe you do automobiles as well. How do you go from a small-parcel business to doing all these different services?

I'd also love to double-click on grocery, just because historically it's such a difficult industry, and you seem to have cracked the code there.

We launched e-commerce back in 2014, and that was the foundation of our marketplace. As you mentioned, this is an Alibaba, Amazon, Coupang, and Carrefour-type marketplace, where sellers sell and buyers buy. Obviously, we deliver through our logistics platform.

The idea of the marketplace was actually quite simple. I was trying to buy a computer once, and I went to a store and selected a model. The salesperson told me that they were opening another store the next day and that I could get a discount at a good price if I went to the opening.

I went to the other store for the opening the next day, but unfortunately they didn't have that model. I had to go back to the initial store, where they said they didn't have a new one but could sell me the display model. I said no, I wanted a new one. They sent me to a third store, and then I tried to buy a printer but they didn't have one.

I navigated between stores for 3 or 4 days, trying to buy the printer and computer I had selected. On top of that, I wasn't really sure what type of model I could buy, and I didn't have reviews.

We decided to put together a single location where you could not only buy and select items, but also compare prices from different merchants. Our marketplace is structured around the product. It's a combination of different sellers presenting their items, along with multiple offers for each item from different sellers. That was a very convenient way for consumers to select and buy items at good prices.

This is how we started. We began with electronics, but now we've expanded into every single vertical. We have access to more than 8 million SKUs on our platform.

The biggest difference compared with many others is that we're not competing with retailers—we're helping them. Most of our retail partners aren't pure online stores; they're also offline retailers. We give them technology and a platform. They can trade across the country through our logistics network, advertise through our advertising services, receive working-capital financing from our fintech unit, and get payment services from our payments platform.

We're helping retailers become more efficient, grow, and trade across the country. That's probably the biggest difference between Kaspi.kz and players like Amazon. We're not competing with retailers; we're helping them. We're also making sure we price our products very fairly, so we're successful only if our merchants are successful.

We've built the largest e-commerce platform in the market, with a very wide range of delivery services that are pretty much free. Most items are delivered the same day or the next day.

I think you have a pretty interesting value proposition in the lockers you use, as well as in your decision to enter grocery. I'd love to hear how those aspects of the e-commerce business work and what motivated you to launch some of these more challenging aspects of consumer retail.

Our business isn't just about innovation. We have an incredible management team with exceptional execution capabilities.

The grocery business is very large. We're talking about a $16 billion or $17 billion market, which is largely fragmented. We decided to enter grocery because the market is very attractive. It's also one of the few verticals we hadn't entered at that time.

We focused on building a business with around 10,000 SKUs. If you think about a hypermarket, which is the largest format, they usually have 20,000 to 25,000 SKUs. We have a data-driven selection of SKUs, which we deliver for free. We can deliver most of our orders within 3 hours, so it's very fast.

When we entered this business, we made it profitable within the first 12 months. Within the first 12 months, our net-income margin on that business was about 6% to 7%, which is an attractive net-income margin by global standards. This was while we were still growing 2 times year over year and investing in the dark stores we operate and in delivery.

We've become profitable while still investing and growing, which is very unusual. The reason is that we've built the business for weekly purchases. The average ticket size is about $30, which is essentially a weekly purchase; it's not quick commerce.

As you know, the larger the ticket size, the better the economics of any e-commerce business. We've been able to achieve that within 12 months, which is really a testament to our management team.

Grocery is now about 5% of our total marketplace GMV. It's becoming very meaningful for us and is the fastest-growing part of the marketplace.

The last pillar of your business is fintech, which in some ways complements the payments and e-commerce businesses by providing buy now, pay later services, as well as other financing for small and medium-sized businesses.

I'd love to hear how the fintech business works with the other verticals, and then about the competitive advantages you bring to market in providing those services.

The competitive advantages we have are the same across all our businesses. The quality of the services has to be extraordinarily high. If the quality of a service isn't at the required standard, we will kill that service.

On the fintech side, we're developing products that are fully online and fully digital. For example, with our buy now, pay later products, we're making 99.9% of decisions in 1 second. Our cost of risk is less than 2%.

For listeners who understand fintech and financial services, that's a world-class cost of risk. It means that while we're making decisions quickly, we're also making the right decisions in terms of the amount, the type of product, how much money a consumer can receive from us, and at what price.

Very importantly, consumers don't like banks. In our case, we enjoy a very high net promoter score on our financial products—around 50 or 60. That tells us we're improving people's lives by providing financial services they can access fully digitally.

The combination of marketplace and fintech is incredibly powerful. Many other companies across the world are now using that combination because, by providing buy now, pay later products, you're increasing the wallet size of your consumers. As a result, consumers can buy more.

You have to make sure you're responsible in managing the indebtedness of your consumers, and that should be reflected in a low cost of risk. But it fuels the growth of the marketplace.

This is why, in recent years, you've seen companies like Apple experiment with buy now, pay later products. Mercado Libre is running its fintech financing offering through its own platforms, and Klarna started as a buy now, pay later provider and is now running its fintech financing offering through its own platforms.

If you extend the financial products from consumers to merchants, then you have a huge network effect. For example, you can provide working capital to merchants, which means they can buy more items and sell more items through you. Their sales grow, your GMV grows, and you can provide other products along the way that drive their sales and contribute to marketplace growth.

You have a business that's still growing very quickly, but you're also facing the economic reality that, of the 20 million people in Kazakhstan, nearly 15 million use the app on a monthly basis. More than $80 billion is moving through your payments network, and penetration is increasingly high.

Where are the opportunities to grow within Kazakhstan? And how do you evaluate opportunities to expand beyond the borders of your home country?

You should think about the number of users and merchants as almost the foundation of our growth. We have more than 14 million users and more than 7,000 merchants. This is our asset, not a limitation on our growth.

This is why we're growing so fast. For example, we're guiding to 65% growth in marketplace revenue this year. We have 14 million happy consumers and merchants who are happy with our services, and now we're innovating on the back of that.

We're going after services and retail. Retail means that we can deliver items to consumers; it's essentially the retail industry. Services include travel and barbershops, and can go as small as plumbers and electricians. The service industry and the retail industry are the 2 big industries we're targeting.

Both are forecast to grow about 14% annually during the next 5 years. With our technology and brand, I believe we'll grow faster than the industries themselves. Those industries are underpenetrated, so they'll grow at 14% annually for the next 5 years, and we'll grow faster than that. That's our whole-market strategy: we'll continue going vertical by vertical.

We shouldn't forget to talk about government services, because Kazakhstan really stands out in that area. On the international side, about a month ago we announced an agreement to buy 65% from the founders of one of the largest marketplaces in Turkey, Hepsiburada.

Turkey is a country of more than 85 million people, and there are a lot of similarities between Kazakhstan and Turkey. We're very excited to take our market to 100 million people through that acquisition.

Hepsiburada is a great company for us. It fits culturally because the company is focused on the quality of its services. It's also profitable, which is very unusual for one of the largest e-commerce companies. It's not burning money; it's mindful of how it grows and wants to grow sustainably.

It's a single-brand company, with Hepsiburada as the main brand. The company cares deeply about merchants, consumers, and its own brand. It has aspirations to launch other services, and Kaspi.kz can bring a lot of expertise.

You bring up a great point about government services. In much of the developed world, many of these things are still done manually, whether it's getting a marriage license or reapplying for a motor-vehicle license. You've figured out how to accelerate the digitization of those services, further entrenching yourself in your core customer base. I'd love to learn more about how that came to be.

When you're driven by the mission of improving people's lives, you're really looking for what you can do better and what you can improve for consumers. About 3 years ago, the president was communicating the digital agenda and expressing a strong belief that technology improves people's lives. At the same time, government agencies and departments were very keen to distribute as many government services as possible to citizens.

We started working with different government agencies to digitize and launch access to those services through the mobile application. Today, it's mind-blowing. I think this is very unique to Kazakhstan, and Kazakhstan doesn't get enough credit for what has been done.

You can register car ownership and issue a driver's license fully online in the mobile app. You can take your photo directly from the mobile app. Usually you hate your first photo and your signature, so you can take them as many times as you want. Then the information is sent online for validation and approval by government agencies, and you receive your driver's license in the mobile app.

You also have digital documents, birth certificates, and the ability to get married, file tax reports, pay taxes, and register your business. There's a wide range of government services that can now be accessed this way.

We don't have any exclusivity around those services. We work together with government agencies, but the services can also be launched through other mobile applications. It's just that our design and user experience are so convenient that most people use government services through our mobile application.

I know you speak a lot about the importance of your company's culture. I thought it would be nice to learn how you've created the culture you're so proud of—something that embodies it and makes the team excited to share Kaspi.kz, continue iterating, come up with new products, and drive them forward. What is it like to work at Kaspi.kz?

An important part of our success, and I think of the way you can develop in the company, is extreme simplification. For example, if we want to launch a product, we may know that it needs 4 features. Some companies would launch the product with all 4 features from day 1.

In our case, extreme simplification means that we'll work really hard to understand which of those 4 features is the most important. Then we'll launch the product with that feature. It's important, but it's also simple and minimal. During the next 3 or 4 quarters, we'll add a new feature every quarter.

At the end of 12 months, you have a product with those 4 features, but you started with an extremely simple product. This creates several positive effects. A simple product means that fewer people are needed to launch it. The people in the support functions who operate and run the product can also start with a simple feature, so they need fewer people.

On the consumer side, users get 1 feature, which gives them an easier time understanding, engaging with, and using the product. They have fewer questions, and we need less education for consumers, because everything around digital, mobile, and online services still requires educating consumers.

As a result, we start with fewer people. Our team becomes more experienced over the course of 12 months, consumers become educated over the course of 12 months, and we continue to be a lean organization. This also generates profitability because you need fewer people to serve and operate the products.

If you think about the product teams, we have roughly 50 product teams across the company. We've built the company product by product, feature by feature, and team by team. From today's perspective, we have 50 products, and if each is launching at least 1 feature every quarter, you have 50 new features from the product teams. That shows you the speed of innovation, but we started many years ago with a single product and a single feature. Now, with 50 teams innovating at that rate, it has become a very strong competitive advantage.

Some services were launched after we started with financial services. Then we launched payments, e-commerce, travel, government services, and grocery. Each of those services was individually a significant innovation.

Take travel. When we launched travel, we had no experience in travel whatsoever. We launched it during COVID, when everybody was pulling out of travel, and we said this was a great time for us to invest and build up our capabilities.

We started with airline tickets, then added train tickets. A bit more than 1 year ago, we added vacation packages, and now we have a pipeline of new ideas around travel. It's an example of how simplicity drives efficiency, profitability, and customer satisfaction.

You have network effects and effectively a flywheel in place in your home country. You produce more than $2 billion in net income, which gives you the opportunity to redeploy capital. You have a modest balance sheet, so you have the privilege of either acquiring businesses or building them.

As you noted, you recently made the decision to enter Turkey, given the complementary nature of that economy and the opportunity there. I'd love to learn more about how you evaluate that decision—build versus buy—and how you think about capital allocation more broadly.

We've been looking for acquisition opportunities to grow outside of Kazakhstan for quite some time. We looked at various alternatives and opportunities, and we're really happy and excited about the opportunity to acquire Hepsiburada.

The company has a lot of similarities with Kaspi.kz. It's founder-led and focused on the quality of its products. It's EBITDA-positive, which is very unusual. It's one of the largest e-commerce companies, but it's not burning money. The company is mindful of how it grows and wants to grow sustainably.

It's a single-brand company, with Hepsiburada as the main brand. It cares deeply about merchants, consumers, and the brand itself. Turkey is a very exciting market because it has 85 million people, and we believe we can take Hepsiburada to another level.

We can introduce services for merchants and consumers in Turkey that will be very innovative and create a lot of value.

You recently made the decision to move your listing from London to Nasdaq. I'm curious about the motivation for that, and also about how you build your relationship with an investor base in the United States or North America that may not have the ability to use the product but understands the strength of the business model. I'd love to learn more about that decision and the value it's created for your business.

We were listed on the London Stock Exchange in 2020. Then we decided to list on Nasdaq in January 2024, and we delisted from the London Stock Exchange.

What we were looking for was liquidity. The thesis before the move was more theoretical, in the sense that there was no example of this being done before us. From today's perspective, you can see that the decision was right and successful. The liquidity of our stock increased almost 20 times on Nasdaq compared with the London Stock Exchange.

We were actually the only company listed on both the London Stock Exchange and Nasdaq, so you could see the difference directly. It can now be measured factually, rather than being theoretical.

The United States is a very exciting market because companies with business models similar to ours are mostly listed there. Take Mercado Libre, Coupang, and others, for example. I think the investor base is right for our business model.

We still need to educate investors and tell them about our business model because it's quite unique. There are very few companies that combine PayPal, Amazon, Mercado Libre, Klarna, Square, and Block in a single mobile application. We're still educating the investor base, but we have a long-term strategy and we're not in a hurry.

Now that you've had the opportunity to interact with more North American investors and you're under the magnifying glass of a U.S. listing, have there been any lessons learned or things that have surprised you?

I wouldn't call them lessons, but I think we're working on 2 fronts. On the one hand, we tell people about our company, our story, and our business model, and make sure we execute, deliver, and create value for shareholders. That's very important.

But equally important for us is telling the story of Kazakhstan. Because we're a company developed in Kazakhstan, we're promoting the country, its investment climate, how dynamic it is, and its development. We're working on both ends, and that's very important.

In terms of risks, what does competition look like for your business? Are there local competitors looking at your markets in different ways? Are there global competitors, with the success of businesses like WeChat, that might encroach upon your territory?

You're going into new territories and facing new competition. You started by attacking an addressable market that was rich and full of opportunity, and I wonder whether your success has attracted competition to the business.

Every business we've launched has had competitors. When we started building our financial services business, there were more than 30 banks. Everybody had savings accounts, consumer loans, prepaid cards, and wire-transfer businesses.

We simply built our products with a focus not on financial metrics, but on quality. One thing I should mention is that our product people don't have financial metrics. They don't have financial KPIs, and most people in the company don't have financial KPIs like profit or revenue.

The most important KPI is the quality of the product, and this is what makes us stand out. When we launched our payment network, there were Visa and Mastercard. When we launched e-commerce, we had a bunch of e-commerce players, including AliExpress and Alibaba, as well as regional players.

Today, we successfully compete with Chinese marketplaces like Temu as well. Every business we launched had competition. Because we're so focused on the quality of the product, we have built a speed of innovation that is mind-blowing.

When you're a company with such an innovation pace, what is your most important competitive advantage?

The reason you succeed is that you have consumers who love your product. If you have a first product that consumers love, and you have a very large and reasonable scale of consumer engagement, then consumers will use every new product you launch because they're already happy with your existing product.

Every time we launch a service, we have incredible adoption rates. It took us 2 years to become the largest travel agency in the market. The same is happening with grocery—we're the biggest grocery company in the market in the city where we started, and we started just a bit more than 1 year ago.

The same is true of e-commerce. Our consumers do the job for us. They're doing the marketing for us and telling each other about the products. This is the most important competitive advantage.

We're a company in a market of 20 million people. We have more than 14 million monthly users, and two-thirds of those users visit our mobile application daily. That tells you we have services that drive consumer engagement. The reason we drive consumer engagement is that the services are very high quality.

In a market of 20 million people, Kaspi.kz wouldn't be able to achieve this scale if we had 1 million consumers who didn't like our products. We simply wouldn't be able to get where we are. We care about every consumer and every merchant, and our dedication to quality is the company's number-one strategic priority.

Our concluding question is generally about lessons learned in building your own business, and lessons that can be applied to other businesses or prospective investments. But I thought we'd do this one a little differently, given that we have the privilege of having a co-founder and CEO of a large and rapidly growing business.

My question is for new investors who are just learning about Kaspi.kz, despite the fact that it's been an almost 20-year overnight success in the making. What do you want them to take away? What do you want people to dig deeper into? What is the message for both the investor and operator universe in learning more about the Kaspi.kz story?

The most important ingredient in Kaspi.kz's business model, and in the way we operate, is our focus on the quality of our products. When we say we're operating in a country of 20 million people, that 14 million use our product, and every product we launch grows, we have a track record of innovation. We'll continue innovating, and we have a strong pipeline of new ideas.

But the foundation of our business is that we're incredibly focused on the consumer experience and the quality of our products. I think that's our biggest asset and our biggest competitive advantage.

Another important point is the super-app business model. I wouldn't say it's undervalued, but I think it has so much potential. I'm blown away when I talk to companies and leaders from different markets and explain how the super app operates.

We're a leading example of how you can have everything in 1 mobile application. People order eggs through our grocery service in the same application where they open a savings account, pay taxes, receive a consumer loan or car loan, and pay their electricity and utility bills.

The super app itself is a very powerful business model. I'm sure that in the future there will be more realization that single applications with multiple services, if executed correctly and with a focus on customer service, will deliver a lot of value to shareholders, but most importantly to consumers and users.

Just to ask 1 follow-up on that, if you look across the world, there are obviously examples of companies like yours that have successfully tried to build a super app. But there have also been many markets where it's been more difficult for the super-app model to take hold.

What do you think is unique about Kazakhstan and your current situation that has allowed the business to introduce such a powerful business model into the economy?

Again, it's the focus on the quality of the services. If you think about a super app, network effects are very important. One service promotes another, but they're also working in the opposite direction. If your product quality is bad, you'll continue losing consumers. Consumers aren't going to use your product.

I think the reason super apps or multiple services within an application haven't been successful or profitable in other markets is that they didn't have a foundational product that consumers loved. If consumers don't love your products, then in a country of 20 million people, if 1 million consumers aren't happy with our service, we're finished. People won't use our next service. We're dead.

In a country of 20 million, we had no other choice but to produce world-class, high-quality products that our consumers love. This is why it's in our DNA, and this is why we're so focused on quality. It was a life-or-death question.

When you're in a bigger market, let's say with 300 million people in front of you, you can lose 1 million here and 1 million there while showing user growth. But at some point, when growth stops, you'll continue losing users and wasting money on marketing because if you lose a consumer, it's 10 times more expensive to bring that consumer back.

In our case, quality of service results in value, profitability, and healthy growth. We can't afford to have unhappy consumers in a country of 20 million people. This is how we've succeeded.

In bigger markets, companies essentially mask the quality of the product with high growth. I think that's the biggest difference in why we were successful. Now we would like to help build this type of culture with Hepsiburada in Turkey.

In other markets, companies talk about quality of service but don't follow the metrics. They're in love with their products, they're losing consumers, and they're spending marketing dollars to bring those consumers back. At some point, when growth in consumer acquisition stops, you start to see all the negative network effects.

Thank you so much for joining us to tell the story of Kaspi.kz. We had the opportunity to interview the co-founder and CEO of a large, growing, and successful business, and we look forward to watching the success of the next 15 or 20 years unfold, hopefully just like the last 15 or 20 years have.

Thank you, Zack, for having me. We're very excited about our business. If anyone wants to learn even more, Harvard Business School wrote 2 cases about us, which I think really discuss our product development and corporate culture.