Business Breakdowns EP.204: Kaspi.kz – The Kazakh Super-App

Podcast: Business Breakdowns
Date: January 22, 2025
Host: Zach Fuss
Guest: Mikhail Lamsaδα, CEO & Co-Founder, Kaspi.kz

Main Theme

This episode explores Kaspi.kz, Kazakhstan’s dominant fintech super-app and one of the most financially successful and innovative tech-driven businesses in the world. CEO and co-founder Mikhail Lamsada joins Zach Fuss to discuss Kaspi’s transformation from a traditional retail bank into a comprehensive digital platform, the unique challenges and opportunities in the Kazakh market, and the secrets behind building a super-app that is core to daily life in an emerging market.

Episode Structure and Key Insights

1. Kaspi.kz: An Overview (02:43–07:16)

• Market Reach: Serving a country of 20M people with 14M+ monthly active users, Kaspi is a $20B market cap fintech super-app listed on NASDAQ.
• Ecosystem: Combines payments, e-commerce, digital financial services, government, and B2B offerings.
• User Engagement: 67% of users access the app daily—second only to WeChat globally.

Quote:
"Pretty much the whole life of our users is in our app and we're extremely proud with the quality of the services we are providing."
—Mikhail Lamsada (05:55)

2. Founder Story & Kazakh Context (07:16–13:37)

• Background: Mikhail Lamsada’s path from Georgia (the country), through Harvard Business School, to private equity investing and ultimately to co-founding Kaspi after stepping in to rescue an ailing Kazakh bank during the 2007–08 financial crisis.
• Kazakhstan’s Economy: Resource-rich, rapidly digitizing, with government and President Tokayev pushing for modernization and digital innovation.
• Transformation to Cashless: In under a decade, Kazakhstan moved from 90% cash transactions to 90% cashless, much of it enabled by Kaspi.

Quote:
"Transformation in Kazakhstan from cash economy to cashless have been mind-blowing really. We have been driving this transformation."
—Mikhail Lamsada (10:42)

3. From Bank to Super-App (13:37–18:00)

• Mission-Driven: The core mission is to “improve people’s lives by developing world-class mobile services.”
• Strategic Expansion: Sequentially entered verticals—starting with financial services, then payments, followed by e-commerce, travel, grocery, B2B, and government.
• Super-App Vision: Defied the prevailing “single-purpose app” trend to build an integrated, one-stop app—challenging both technically and strategically.

Quote:
"Why cannot we become a tech company, why we cannot launch mobile services?... Our mission is to make users' life easier, not our life easier." —Mikhail Lamsada (15:14)

4. Culture & Customer Obsession (18:00–22:38)

• Product-Driven Teams: Structured around products, each with complete ownership and direct accountability.
• Radical Use of Net Promoter Score: Measures customer happiness obsessively—even eliminating products with weak scores (e.g., axing a profitable credit card product).
• Continuous Feedback Loops: Weekly feedback from half a million users; direct follow-ups influencing product releases.

Quote:
"If the net promoter score is negative, which by the way happened only once in our history, we either have to drastically change or we kill the product."
—Mikhail Lamsada (21:37)

5. Payments Infrastructure (22:38–24:58)

• Closed-Loop System: Functions like Apple Pay and Cash App, enabling instant, commission-free P2P payments and QR-based merchant transactions.
• Disruption: Underpriced services, bypassing legacy networks such as Visa and Mastercard.
• B2B Payments: Innovation focused on convenience stores, allowing seamless invoice settlements and money transfers between businesses and suppliers.

Quote:
"We are the closed loop... The biggest difference from many other payment services is actually that we control the entire value experience from merchants to consumers." —Mikhail Lamsada (23:30)

6. Marketplace: E-Commerce & Beyond (24:58–31:05)

• Marketplace Model: Functions like an Amazon/Alibaba hybrid, focusing on enabling (not outcompeting) local retailers and aggregating SKUs and prices for consumers.
• Logistics & Delivery: Focus on speed (same or next-day delivery); widespread use of secure parcel lockers.
• E-Grocery Breakthrough: Profitable within 12 months—a rare feat in global online grocery, with 3-hour free delivery and $30 weekly average basket.

Quote:
"We are not competing with the retailers, we're helping them... We're successful only if our merchants are successful." —Mikhail Lamsada (27:19)

7. FinTech: Lending & BNPL (31:05–34:11)

• Digital-First Lending: Fully online, data-driven, near-instant decisions; cost of risk below 2%.
• Integration: Lending (BNPL) fuels marketplace GMV and merchant growth; working capital lending deepens merchant relationships.

Quote:
"On our buy now pay later products we are making 99.9% of decisions in a second; our cost of risk is less than 2%—that’s world-class." —Mikhail Lamsada (31:44)

8. Growth, Expansion, and M&A (34:11–37:01)

• Domestic Growth: Penetration in retail and service sectors is a key unlock; each vertical (e.g., travel, services, grocery) presents new opportunities.
• International Expansion: Recent acquisition of a majority stake in Turkey's Hepsiburada, aiming to replicate the super-app model in a market of 85M+.

Quote:
"We signed agreement to buy 65% of one of the largest marketplaces in Turkey... We believe we can take Hepsiburada to another level." —Mikhail Lamsada (36:06)

9. Government Services as Differentiator (37:01–39:16)

• Digital Citizenship: Seamless digital access to vital government services—issuing licenses, birth certificates, business registration, tax payment—directly within the app, no exclusivity but dominant usability.
• Strategic Moat: Deep integration into daily life builds stickiness.

Quote:
"You can get married, you can get birth certificates for your kids, register your business, pay taxes… All within our app."
—Mikhail Lamsada (37:56)

10. Organizational Culture & Simplification (39:16–43:15)

• Extreme Simplification: Ruthlessly prioritize product features—launch with only the most essential, then iterate.
• Lean & Fast: Keep teams small and experienced; incremental feature releases ensure organizational learning and customer adaptation.
• Compounding Innovation: 50+ product teams, each delivering at least one new feature per quarter.

Quote:
"Extreme simplification means we'll really work really hard to understand which out of those four features is the most important feature. And then we will launch... with this feature which is important, but it's also simple and it's a minimum." —Mikhail Lamsada (40:00)

11. Capital Allocation & Listing Strategy (43:15–46:51)

• Strategic M&A: Focus on founder-led, EBITDA-positive targets (e.g., Hepsiburada), mirroring Kaspi's product philosophy.
• NASDAQ Listing: Moved from LSE to NASDAQ for greater liquidity (trading volume up 20x) and a more aligned investor base.
• Investor Education: Part of the challenge is familiarizing global investors with both Kazakhstan and the super-app model.

Quote:
"Liquidity of our stock increased almost 20 times on Nasdaq compared to London... Most companies similar to us are listed in the US." —Mikhail Lamsada (45:33)

12. Competition & Moat (47:40–51:14)

• Intense Competition: Entered every market against entrenched incumbents (banks, Visa/Mastercard, Alibaba, Chinese cross-border giants).
• Quality First: Product teams lack financial KPIs—they’re measured by quality and customer NPS.
• Network Effects: High consumer engagement ensures swift uptake for new products; word of mouth drives growth.

Quote:
"Our product guys don't have financial KPIs… The most important KPI is the quality of the product." —Mikhail Lamsada (48:35)

13. Lessons & Super-App Model Insights (51:14–56:16)

• Core Lesson: “Quality obsession” is the foundation of enduring success; the super-app model is powerful but high risk—requires genuine customer delight, or negative network effects can destroy value.
• Kazakhstan as a Testbed: High market concentration forces relentless focus on product quality; larger markets can “hide” poor quality behind user growth.

Quote:
"We had no other choice but to produce world-class, high-quality products which our consumers love... It was a life and death question."
—Mikhail Lamsada (54:22)

Notable Quotes & Timelines

| Timestamp | Speaker | Quote | |-----------|------------------------|--------------------------------------------------------------------------------------------------------| | 05:55 | Mikhail Lamsada | "Pretty much the whole life of our users is in our app and we're extremely proud with the quality..." | | 10:42 | Mikhail Lamsada | "Transformation in Kazakhstan from cash economy to cashless have been mind-blowing really..." | | 15:14 | Mikhail Lamsada | "Why cannot we become a tech company, why we cannot launch mobile services?... Our mission is to make users' life easier, not our life easier." | | 21:37 | Mikhail Lamsada | "If the net promoter score is negative... we either have to drastically change or we kill the product." | | 23:30 | Mikhail Lamsada | "We are the closed loop... we control the entire value experience from merchants to consumers." | | 27:19 | Mikhail Lamsada | "We are not competing with the retailers, we're helping them... We're successful only if our merchants are successful." | | 31:44 | Mikhail Lamsada | "On our buy now pay later products we are making 99.9% of decisions in a second; our cost of risk is less than 2%—that’s world-class." | | 36:06 | Mikhail Lamsada | "We signed an agreement to buy 65% of one of the largest marketplaces in Turkey... We believe we can take Hepsiburada to another level." | | 40:00 | Mikhail Lamsada | "Extreme simplification means... we will launch the product with this feature which is important, but it's also simple and it's a minimum." | | 45:33 | Mikhail Lamsada | "Liquidity of our stock increased almost 20 times on Nasdaq compared to London... Most companies similar to us are listed in the US." | | 48:35 | Mikhail Lamsada | "Our product guys don't have financial KPIs… The most important KPI is the quality of the product." | | 54:22 | Mikhail Lamsada | "We had no other choice but to produce world-class, high-quality products which our consumers love... It was a life and death question." |

Conclusion

Kaspi.kz exemplifies how focused innovation, relentless attention to customer experience, and strategic risk-taking can transform a local bank into a cornerstone of a nation’s digital economy, even in emerging markets. Their super-app model successfully compiles payments, financial services, e-commerce, and government access into a seamless, hyper-engaging platform that earns the loyalty of both consumers and merchants. With its expansion into Turkey and deepening platform moat, Kaspi is well-positioned to shape the future of digital life in frontier and emerging markets alike.

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