A profile on Kaspi.kz - a bank turned technology company that IPO’d in London last month raising over $1 billion and becoming the largest listing out of Central Asia
Thanks for the write-up! The business fundamentals here definitely look impressive. Just one thing you haven't touched upon - the corporate governance - how would you recommend more quality-focused, long-term investors follow this regard in the cases of under-followed emerging markets like Kazakhstan?
A few thoughts on developing services in-house, though.
1. Sure, long term being an aggregator is the most capital efficient model, but
2. Doesn't an aspiring aggregator need some critical mass to be able so onboard new partners? I mean, if I would start a new aggregation platform, why would anybody want to sign up (on my terms)? Just look at how Tencent, Gojek etc. and even the iOS/Android app stores started out. They had their own services and only over time added lots of third party services.
3. And finally, while relatively costly, the ability to create services in-house could a tool to force other service providers onto Kaspi's platform at lucrative terms. Kaspi can simply threaten them to replicate their business or acquire their closest competitor and integrate them into the platform. Once Kaspi has demonstrated its power, it will be much easier to demand high commissions from third party service providers. At the same time Kaspi will be able to reduce its capital intensity which should benefit scalability. I am curious to see how things will evolve around their acquisitions and expansion into Azerbaijan.
In essence, owning the business end-to-end (for now) could be another strategic long-term play.
Very thorough analysis written the way it is easy to follow and comprehend. Structured, presented excellent with good pictures inserts. Excellent reading!
Insightful and simple read, Aika, well done! Just subscribed to your blog
Very nice
Great job! Very interesting
Thanks for the write-up! The business fundamentals here definitely look impressive. Just one thing you haven't touched upon - the corporate governance - how would you recommend more quality-focused, long-term investors follow this regard in the cases of under-followed emerging markets like Kazakhstan?
Great article, thanks.
A few thoughts on developing services in-house, though.
1. Sure, long term being an aggregator is the most capital efficient model, but
2. Doesn't an aspiring aggregator need some critical mass to be able so onboard new partners? I mean, if I would start a new aggregation platform, why would anybody want to sign up (on my terms)? Just look at how Tencent, Gojek etc. and even the iOS/Android app stores started out. They had their own services and only over time added lots of third party services.
3. And finally, while relatively costly, the ability to create services in-house could a tool to force other service providers onto Kaspi's platform at lucrative terms. Kaspi can simply threaten them to replicate their business or acquire their closest competitor and integrate them into the platform. Once Kaspi has demonstrated its power, it will be much easier to demand high commissions from third party service providers. At the same time Kaspi will be able to reduce its capital intensity which should benefit scalability. I am curious to see how things will evolve around their acquisitions and expansion into Azerbaijan.
In essence, owning the business end-to-end (for now) could be another strategic long-term play.
Very thorough analysis written the way it is easy to follow and comprehend. Structured, presented excellent with good pictures inserts. Excellent reading!