Kazakhstan-based fintech and marketplace giant Kaspi.kz (Nasdaq/KSPI, Almaty/KSPI) has signed a definitive agreement with members of Turkey's Dogan family to acquire 65% of Turkish e-commerce platform Hepsiburada (Nasdaq/HEPS) for $1.1bn, Kaspi said on October 18.

Kaspi expects to close the deal in 1Q25. It will pay $600mn on closing and the remaining $527mn over the following six months. The company intends to use its own cash from operations and cash at hand to make the payments.

Under the deal, Hanzade Dogan, Vuslat Dogan Sabanci, Begum Dogan Faralyali, Arzuhan Dogan Yalcindag and Isil Dogan will sell all their Type A and Type B shares in Hepsiburada (formally D-Market Electronic Services) to Kaspi.

DLA Piper LLP (US), Akol Law (Turkey) and Kinstellar Almaty (Kinstellar LLP) served as legal counsel to Kaspi.kz while Sullivan & Cromwell LLP (US), Kabine Law Office (Turkey) and Dentons LLP (Kazakhstan) served as legal counsel to the Dogan family.

Shareholders of Hepsi

Hanzade Dogan has a 21.5% stake in Hepsiburada and holds 71% of the voting power in the company.

The Dogan family control over the company amounts to a 65.4% stake. TurkCommerce B.V. controls 14.6%.

TurkCommerce is majority-owned by an investment fund managed by US asset manager Franklin Templeton (New York/BEN).

The European Bank for Reconstruction and Development (EBRD) and the World Bank’s International Finance Corporation (IFC) also have stakes in Hepsiburada via TurkCommerce, but they have not released exact figures on their holdings.

Lossmaker

In 2023, Hepsiburada, launched in 2000 by Hanzade Dogan, posted a gross merchandise value (GMV) of $4bn, stating it had 12mn consumers and 0.1mn merchants.

Hepsiburada has always been a lossmaking enterprise. It does not anticipate paying dividends.

Hepsiburada’s unit Hepsipay is a payment solutions provider while HepsiGlobal works on foreign markets.

IPO adventure

In 2021, Hepsiburada sold a 20% stake via an initial public offering (IPO) for a consideration of $728mn amid a COVID-19 global liquidity boom. The share price stood at $12, valuing the enterprise at $4bn.

On July 2, 2021, Hepsiburada shares were opened to trading on the market. On July 7, the share price saw $15.23. 

In August 2021, after Hepsiburada released its financials, a freefall began. In July 2022, the price saw $0.59.

In 2022, the company agreed to pay a total of $14mn in compensation to investors who filed two lawsuits against the company, board members and senior management, the underwriters of the Hepsiburada IPO and the selling shareholder TurkCommerce.

$5.36 per share

After Kaspi’s press release on the acquisition dropped on October 18, Hepsiburada’s share price jumped 39.7% to $4.05 from $2.90. It closed the week at $3.51.

Kaspi will pay around $5.36 per share. Hepsiburada has 321mn outstanding shares and its market capitalisation stood at $1.1bn at market close.

Kazakh giant

Kaspi.kz is Kazakhstan’s first unicorn (a start-up that becomes valued at $1bn or more by public or private investors) and also its largest company by market capitalisation. It operates a "Super App" that offers services in fields that include fintech and marketplace platforms.

In 2023, it had 14mn monthly and 9mn daily active users, along with 0.6mn merchants.

Kazakh billionaire Vyacheslav Kim holds a 21% stake in Kaspi while Georgia-born Mikheil Lomtadze controls 23% and Baring Funds 25%.

The remaining 27% is listed on the Nasdaq and Kazakhstan Stock Exchange (KASE).

Kaspi has a BBB-/Stable rating from Fitch Ratings, a BB+/Stable from S&P Global Ratings and a Baa3/Stable from Moody’s Investors Service.

In September, a report by short seller Culper Research hit the share price of Kaspi with claims that the company "systematically misled" investors and US regulators over its Russia links. The company rejected the claims.

Welcome to Turkey

The origins of the Turkish e-commerce market are found in the 1990s. In 2022, the market grew to TRY801bn ($43bn) from TRY382bn ($29bn). The size of the e-commerce market corresponded to 6% of the country’s GDP in 2022, up from 5.7% in 2021.

In the country's currently fragmented e-commerce market, Trendyol, launched in 2010 and serving as the Turkish unit of China's Alibaba (New York/BABA; Hong Kong/9988) since 2018, is the market leader with a market share standing at about 30%.

Hepsiburada reported a GMV of TRY 54bn, representing a 7% share in Turkey’s combined retail e-commerce volume (down from 9% in 2021).

n11 (formally Dogus Planet), a JV of Getir, Dogus Holding and SK Group (Seoul/034730), has a market share of around 8%.

In July 2022, eBay (Nasdaq/EBAY) shut down its Turkish unit GittiGidiyor. It was launched in 2001, served as eBay's Turkish unit from 2011 and accounted for a market share of around 4%.

Amazon (Nasdaq/AMZN) entered the Turkish market in 2018 and remains a relatively small player, compared to rivals. Morhipo, founded in 2011 by Boyner Group, has a similar status.

So far, Turkey has seen the emergence of two decacorns, namely Alibaba’s Trendyol and Getir (a rapid groceries delivery app) along with five unicorns, namely Peak Games (acquired by Zynga (Nasdaq/ZNGA)), another games developer Dream Games, Hepsiburada, artificial intelligence (AI)-based martech (marketing platform) Insider Growth Management Platform and Istanbul-based fintech Papara (launched in 2015).