Freedom Holding Corp. Builds Bridges Between East and West
In addition to our thriving business in Central Asia and parts of Europe, Freedom Holding Corp. has been actively developing its business in the U.S. We’ve built reliable infrastructure, obtained necessary licenses, and assembled a strong team. Last year, our American subsidiary became a full-fledged underwriter and successfully organized a set of IPOs and secondary offerings.
Our company is always open about its achievements because we believe that this is the foundation of trusting relations with our clients and our shareholders, and we think that it’s important for us to not just to talk about what we do, but also to show it. It’s for this reason that we invited a pool of journalists from Europe to visit the U.S. to meet our American subsidiary and engage with some of the largest American financial institutions we deal with, such as the NYSE and NASDAQ.
Top executives from our US subsidiary spent almost a week with this team of journalists, answering questions, filling in gaps, and providing a look at yet another dimension of Freedom Holding Corp. We provided them with a kind of “window to America,” just like our Tradernet investment platform provides a window for more than 250,000 European investors who want to gain access to the American market.
At the recent XIV LD Micro Invitational Conference for investors, and the Freedom Capital Markets Family Office Summit in New York, we spoke about the creation of our diversified fintech ecosystem in Kazakhstan where our fintech work and digitalization is rapidly becoming a global benchmark for how to do business. In doing so, we let our mostly American audience know that our expansion into the US markets could not have happened without the success we have achieved in Kazakhstan, arguably the most digitally forward country in the region.
In Kazakhstan we did something similar. About 2 years ago we invited European journalists to observe the scale and level of digitalization in our country and what Freedom was doing to simplify and improve service for its customers with the help of new technologies. In addition to having a vision for the future of our business, we have a vision for the future of our country, and we build bridges, trust, and credibility between the East and West by opening our doors, actively communicating, and by being transparent in all we do.
In Kazakhstan, more than five million clients use our business ecosystem to access not just basic financial services such as our stock brokerage and retail bank, but also insurance and other retail services as well. Over the past number of years, we’ve been focusing on the lifestyle segment and have acquired several very promising companies at what we believe have been very attractive valuations. During the pandemic, we bought Ticketon, a Kazakhstani online ticket service, for $3 million, which the year before was valued at $12 million. Similar companies in the U.S. are multi-billion-dollar businesses with multi-billion-dollar valuations. The Ticketon platform now holds the leading position in the cinema, theater, and event ticket sales market in Kazakhstan with a market share of 70%, and generates approximately $300,000 in operational revenue per month.
A further example is Aviata, a flight booking and travel service we acquired for $30 million. This company generates millions of dollars in net profit and has huge growth potential thanks to its loyal customer base of two million frequent flyers. From a mergers and acquisitions perspective, this aligns perfectly with our current Freedom Bank business as these customers are ideal candidates for the Bank.
Over the course of the last several years we have invested about $100 million in various services of Freedom’s ecosystem, proving that relatively small investments with the right team could be extremely productive. This combination helped Freedom capture significant market share in various verticals, collect data, and better understand how five million of the most active Kazakhstanis (out of a population of 20 million) consume one product or another.
It would give me no greater pleasure than to expand the expertise and success we have found in building our ecosystem in Kazakhstan to other regions where Freedom operates. This will take time, effort, and further investment as we navigate and comply with each region’s regulatory requirements, but we believe it is a worthwhile endeavor, and with patience and a prudent step-by-step approach, we firmly believe we can do it…look at what we’ve done in Kazakhstan. With this as our foundation, from here, no bridge is too far to create trust and by extension, value.
