Timur Turlov: More Than Five Million Customers Trust Freedom's Ecosystem
More than 5 million customers use the services of various companies within Freedom Holding Corp.’s ecosystem, according to the company’s CEO Timur Turlov. He made this statement during an LD Micro investment conference in New York where he was a keynote speaker.
`Our brokers render services to more than half a million customers, while more than five million clients use banking, insurance, lifestyle and e-commerce services within our ecosystem in Kazakhstan in general. Thanks to $100 million investments in a set of startups with significant market share [Aviata, Arbuz.kz, etc.], we have successfully made them part of our ecosystem,` said the CEO and primary shareholder of Freedom Holding.
The entrepreneur believes that acquiring healthy businesses with big market share has let the company gain unique data. For instance, as the company has a share in a service responsible for traffic surveillance cameras, Freedom Insurance can conduct swift digital assessments of traffic incidents.
`In Almaty alone, we have more than 7,000 cameras that help us assess the driving style of hundreds of thousands of people and apply customized approaches to our customers. As a result, we’ve digitalized the entire process of insurance policy issuing and insurance claim payment, which do not require a client’s physical presence at many stages. That saved us a lot of money,` Turlov said, revealing that the company has invested around $40 million in its insurance business, making it the fifth biggest car insurance company in the country.
While speaking about the ecosystem, Timur Turlov pointed out that when Freedom acquires startups, it doesn’t intervene in their way of doing business, and many of these local companies have become profitable.
`I am very proud that we found a way to cooperate with founders of startups which have become part of our group. Within the ecosystem, these services are continuing to grow, while managing to keep the startup energy, focus on products and create positive cash flow,` he said at the conference. `We are interested in a variety of verticals, such as e-commerce and financial payments that have significant upside potential. As an example, several years ago we acquired a payment processing company that is now highly profitable and we have since made back our initial investment in the company [Freedom Pay, which operates on three different markets]. In this situation, we not only acquired a client base or technology, we gained people who are professionals in what they are doing,` he added.
According to the businessman, relatively small investments along with the right team helped the company gain significant market share in various verticals as well as collect large amounts of data to better understand the consumer behavior of 5 million of the most active users of our services, out of Kazakhstan’s total population of 20 million.
All products and services within the ecosystem complement each other, creating synergy, Timur Turlov highlighted. `Through our payment service, we have gained access to 300,000 small businesses and their transaction data. Based on this information, we can offer them better financial products and services. We are also trying to expand this information with the help of various state databases,` he says, pointing to digital integration between the ecosystem's services as the key task for further growth of the business.
The financier also noted that the company has come a long way since the time it was established. Over the past 15 years, Freedom has grown from a small brokerage organization into a diversified international holding company with a full-fledged financial and ancillary services ecosystem in Kazakhstan. `In 2021, brokerage fees accounted for the lion’s share of our revenue. In our last fiscal year, [the company is preparing its financial report for the 2024 financial year, ending on March 31, 2024] these fees accounted for less than half of our revenue as we became a profitable digital bank. We are also the second-biggest life insurance company, fifth-biggest property insurance company and the second-biggest financial services ecosystem in our country with the lowest customer acquisition cost in the market,` Turlov emphasized.
Freedom Bank is one of the top eight biggest banks in Kazakhstan. In the third quarter of the 2024 fiscal year (for the period ended on December 31, 2023) it earned $140.2 million out of $418.6 million in revenue of the entire enterprise. Recently, the Bank launched its new Freedom SuperApp, a mobile app that combines various services available within the company’s ecosystem. Furthermore, Freedom has announced its intention to open a subsidiary bank in Tajikistan in the not too distant future.
The key driver of Freedom’s success is its corporate culture and the ability to build a team with a main focus on human capital, according to the businessman. `All services, financial services included, are created by people and talent. Even though over the past several years Freedom as a company has changed dramatically, we are still the same team,` Turlov highlights.
He is convinced that all the experiences, technologies and practices Freedom has gained and developed while working on its ecosystem in Kazakhstan might be exported to other markets such as the U.S.. `We’ve been successfully developing our business in Kazakhstan and Europe where we run a dozen offices. More than 250,000 customers in the EU use Tradernet, our trading platform to obtain access to the American and European stock markets as well as to news, options and analytical data. I do not doubt that our digital banking and insurance products could achieve success if they are exported to much bigger markets.` Given that each market is regulated in its own way, Turlov admits that the move would require significant effort from the company. However, he is convinced that his team will find the best option for adjusting Freedom’s ecosystem to other market environments.
The businessman pointed out that Freedom has already done a lot to strengthen its position in the U.S. over the past several years. `We were developing our infrastructure here, obtaining licenses and expanding staff. We facilitated initial public offerings of several American companies as a full-fledged underwriter and closed several transactions. This is the result of a lot of work,` he said, citing the acquisition of LD Micro in March 2023 as one the latest deals in the U.S.