On Nov. 13, Freedom Holding Corp. will celebrate its 16th birthday. Since its inception, the company has transformed from a local brokerage business into one of the largest financial and investment groups in the CIS and a full-fledged global actor with a multi-billion market cap and millions of clients. How has a regional player managed to make it to the highest league of global finances?
First steps of Freedom Holding Corp.
Under the leadership of Timur Turlov, in 2008, a group of former employees of Uniastrum Bank established Freedom Finance, a brokerage company focused on providing access to the U.S. stock market. The timing was right for the start of their new business as, in March of 2009, a massive stock market rally emerged on Wall Street, facilitating the process of forming and expanding Freedom’s client base. Since then, what the company has achieved in the Kazakhstani market has been especially impressive, as Freedom has become the largest broker and underwriter of public offerings of shares and bonds.
The Freedom Holding Corp. has since expanded its business interests into new spheres, incorporating flight and event ticket services, an online payment service, and a smartphone retail network into Freedom’s financial ecosystem.
In October 2019, Freedom Holding’s shares began trading on Nasdaq with an initial price of $14 per share. Five years later, the company’s share price rose to $100 per share, outperforming key American indexes, such as the S&P 500 and Nasdaq-100. The current market cap of the Freedom Holding Corp. is more than $6 billion. Freedom has achieved these results mainly because of the consistent delivery of positive financial results. While the company’s revenue was about $70 million at the time of its Nasdaq debut, five years later, this indicator rose 20-fold, exceeding $1.6 billion.
Thanks to a strategic decision to combine all of Freedom Holding’s subsidiaries into one financial services ecosystem, Freedom has managed to improve its financial results through the cross-selling of its products and services offered by enterprises within the ecosystem. For example, the brokerage business line is represented by Freedom Finance, JSC, and Freedom Finance Global. Both structures have been combined into a single brand of Freedom Broker, rendering more than 280,000 retail investors.
Trading Platform
Freedom Holding Corp. has also invested considerable effort in developing its trading platform, Tradernet, which is accessible via a mobile app from desktops and mobile devices. Through this platform, investors can conduct deals on American stock and option markets, monitor financial news, and assess the performance of their portfolios.
Freedom Bank, which is ranked among the largest commercial banks in the country in terms of assets, is the second biggest business within the enterprise. The Bank is also the leader in terms of issuing online mortgages in Kazakhstan, as well as offering digital car loans and a variety of additional financial services. Customers can have their loans funded without having to collect hard copies of documents and visit the Bank in person. Moreover, in collaboration with Freedom Finance Global, the Bank also issues cards linked to a brokerage and a special D-account. The first is designed for making transactions with securities, while the second is a non-trading account for keeping dollars, euros, or the tenge with interest accrual every month.
Super App
The Bank is the foundational element of Freedom’s ecosystem. This spring, the Bank launched its Super App, which allows customers in certain regions to access all the company’s services. Furthermore, Kazakhstani clients of the Bank can receive cashback in the form of Freedom’s shares thanks to a unique loyalty program launched by Freedom Bank. For services from companies within the ecosystem (Freedom Insurance, Arbuz.kz and Ticketon), customers can obtain a bonus of 16%. This money might be converted into any other currency, transferred to another person, spent, or kept in the account. The latter option also offers an additional income as this currency is linked to the share price of Freedom Holding Corp.
Since 2023, Freedom Holding Corp. has also been actively developing its own telecommunications operator, Freedom Telecom, investing hundreds of millions of dollars in the construction of infrastructure necessary to deploy a 5G network.
The target audience is the entire world
International expansion is part of the company’s long-term strategy. Freedom Holding Corp. opened its first offices abroad even before its Nasdaq listing. Over the past several years, the company has opened offices in Armenia (Freedom Armenia), Kyrgyzstan, Uzbekistan, Austria, Belgium, Bulgaria, Italy and the Netherlands. Additionally, the company’s office in Cyprus has been operational for years (Freedom Europe). All in all, the Freedom Holding Corp. subsidiaries render services to more than 300,000 clients in Europe. Now, a brokerage division of the company is going to enter the UAE and Turkish markets upon obtaining the required corresponding licenses.
Freedom Bank recently obtained a license for its operations in Tajikistan, Uzbekistan, and Kyrgyzstan. The company’s subsidiary, Freedom Pay, an operator of online payments, already offers its services to a wide range of customers.
Apart from Europe, Central Asia, and the Middle East, the company is also actively developing its business in the U.S., where it runs Freedom Capital Markets (FCM) and LD Micro, a recently acquired investor conference platform for micro-cap companies. FCM has an underwriter license and has facilitated public offerings for prospective projects in the biopharmaceutical and technology spheres since last year.
Looking to the future
Freedom Holding Corp. currently has more than 189 offices in 22 countries while planning new international expansion and the development of promising financial products. “To ensure that we are not losing the competition, we have to create the best services in the world, at least in our sectors, while continuing to scale our business in new geographies,” commented Timur Turlov, the founder and CEO of the company.
Development of innovative services and international expansion are the key elements of the company’s success, boosting its financial results and market capitalization multifold. However, 16 years after the company was established, we still believe that the best years of Freedom Holding Corp. are yet to come.
