Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Global Activities 2020 Report
  • Global Donors & Funds
  • Alumni Home
  • Giving
  • Global
  • Africa
  • Asia Pacific
  • Europe
  • Israel
  • Latin America
  • Middle East & North Africa
  • South Asia
  • …→
  • Harvard Business School→
  • Global Activities 2019–2020→
  • Middle East & North Africa
    • Middle East & North Africa
    • Understanding Entrepreneurial Opportunity in Kazakhstan
    • Approaching Business with an Artistic Eye
    →
  • Understanding Entrepreneurial Opportunity in Kazakhstan→

Middle East & North Africa

Middle East & North Africa

  • Understanding Entrepreneurial Opportunity in Kazakhstan
  • Approaching Business with an Artistic Eye

Understanding Entrepreneurial Opportunity in Kazakhstan

 
Pictured: Mikheil Lomtadze (MBA 2002) returned to the HBS classroom as a case protagonist.
In mid-2018, Mikheil Lomtadze (MBA 2002), CEO of Kaspi.kz, faced a perplexing question: Was this the right time to bring the Kazakhstani company to IPO? The decision was particularly difficult because of Kaspi.kz’s unique story.
Pictured: Mikheil Lomtadze (MBA 2002) returned to the HBS classroom as a case protagonist.

The private-equity-owned company had once been a traditional retail bank, but under Lomtadze’s leadership, it had transformed itself into the country’s most popular online platform, dominating the e-commerce, payments, and fintech sectors at the same time that Kazakhstan’s economy was seeing rapid growth. How would Lomtadze and his leadership team explain this evolution and future potential to investors in London and New York?

Kaspi.kz’s business model is one that is unlikely to have developed elsewhere, says Victoria Ivashina, the Lovett-Learned Professor of Finance and the faculty chair of HBS’s Middle East and North Africa Research Center (MENARC). “In emerging markets—which are hugely underserved and operating under so many constraints—there is a lot of entrepreneurship in sectors such as banking,” she explains. “In the US economy or in Europe, these areas are dominated by traditional players, but that’s not the case in Kazakhstan.”

“These are fascinating markets with big opportunities. For students who come from the United States or Europe, these cases expose them to something new and test their understanding of business issues in a different context.”
Victoria lvashina
Lovett-Learned Professor of Finance
Faculty Chair, HBS Middle East and North Africa Research Center
(pictured with Vyacheslav Kim, Chairman of the Board, Kaspi.kz)
“These are fascinating markets with big opportunities. For students who come from the United States or Europe, these cases expose them to something new and test their understanding of business issues in a different context.”
Victoria lvashina
Lovett-Learned Professor of Finance
Faculty Chair, HBS Middle East and North Africa Research Center
(pictured with Vyacheslav Kim, Chairman of the Board, Kaspi.kz)

Introduction to Kazakhstan

Along with Esel Çekin, executive director of the HBS MENARC, Ivashina wrote a case study on Kaspi.kz with the goal of introducing students to both the company and the country where Ivashina herself was born. Kazakhstan is the largest economy in Central Asia, and a quickly changing one; the GDP in the former Soviet republic has grown six-fold since 2002 and the country serves as a transportation link between China and Western Europe. The case is an example of faculty members’ increased interest in conducting research in the region. “These are fascinating markets with big opportunities,” Ivashina says. “For students who come from the United States or Europe, these cases expose them to something new and test their understanding of business issues in a different context.”

Ivashina first taught the “Kaspi.kz IPO” case in her Private Equity Finance class in the fall of 2019. Lomtadze, at the tail end of an international roadshow in preparation for an IPO on the London Stock Exchange, returned to HBS to attend the class discussion along with the Kaspi.kz leadership team, a young group with roots in Kazakhstan, Georgia, Russia, Belarus, and Korea. “In that diversity, the students could immediately see something about the cultural life of Kazakhstan,” Ivashina says.

“The MBA students were asking most of the same questions the investors asked us during the IPO process.”
Mikheil Lomtadze (MBA 2002)
CEO, Kaspi.kz

Case Protagonist

For Lomtadze, being a case protagonist was reminiscent of the challenges of being an HBS student. “The MBA students were asking most of the same questions the investors asked us during the IPO process,” he recalls. The case discussion grappled with when to go to IPO and where to do so, a nitty-gritty view of the process outsiders aren’t always privy to. Lomtadze and the students debated if Kaspi.kz was still a bank, with the majority deciding—as Lomtadze did—that the company was now a technology platform. And the students wondered—as the Kaspi.kz team had—how to sell that vision to investment banks and investors.

Lomtadze provided a twist ending for the case. Kaspi.kz had decided to put the IPO on hold. The company felt that its business model had not been explained properly by its advisors and consequently had been undervalued, and the leadership team believed that they needed more time to execute on the strategy to better prove the value of its mobile app and ecosystem-driven strategy. The students were concerned that the company would suffer from the aborted plans.

Interestingly, about a year after Lomtadze’s class visit, he and his team decided to proceed with the IPO on October 15, 2020. The move proved fruitful—Kaspi.kz was oversubscribed by five times and valued at $6.5 billion.

“At the end, Kaspi.kz London IPO was a success,” observes Ivashina, “but the case illustrates the significant frictions in the financial markets and the constantly evolving challenges and opportunities for innovative business models like Kaspi.kz.”

More on Middle East & North Africa

Approaching Business with an Artistic Eye

Yazan Halwani (MBA 2020) pursued an HBS MBA to gain the business skills he needed to further his artistic and entrepreneurial interests, including the launch of his fashion e-commerce company, Darza.
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
Phone: 1.617.495.4957
Email: donorrelations@hbs.edu
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College