Kazakhstan: 2024’s Largest IPO Score So Far

Kaspi.kz recently became the first Kazakhstan-based company to list in the US. Even more noteworthy: It’s the third-largest initial public offering (IPO) in a year—after semiconductor giant Arm Ltd. and Johnson & Johnson’s consumer health spinoff, Kenvue.

While Kazakhstan is known for its mineral and fossil fuel resources, Kaspi.kz is a mobile super app company. It offers a range of services, including e-commerce, payments, banking, travel booking, and grocery delivery. Its debut on the Nasdaq was muted, with shares closing just 0.5% above its offer price of $92. Kaspi.kz aims to expand to 100 million users; it currently has 13.5 million customers. 

  “We’ve always had to stand on our own two feet,” Kaspi.kz’s co-founder and CEO Mikheil Lomtadze wrote in a shareholder letter. “This meant growth and profitability from the beginning, not growth with the ever-shifting promise of making the business profitable at some future point.” 

Some obervers consider Kaspi.kz’s offering a cross-listing rather than an IPO since the company is already listed on both its domestic market as well as the London Stock Exchange. “The prestige associated with a presence on the Nasdaq is likely to be a factor behind their decision to list in the US,” says Ufuk Güçbilmez, senior lecturer in finance at the University of Glasgow’s Adam Smith Business School. “This could be used as a marketing tool locally and help with further expansion in their region.”

  The immediate impact of the IPO is likely to be limited. “Another key factor behind the listing seems to be providing a financial exit for the co-founders and private equity backers,” Güçbilmez explains. “All the shares on offer were their existing shares, and no new shares were issued.” In other words, the proceeds went to the selling shareholders—not the actual company. “In effect, the offering served as a tool for them to realize a return on their risky investments made at the early stages of this business, while allowing US investors to gain easy access to a successful tech business in a foreign market,” he said.