Financial platform Douugh makes its ASX debut in a reverse takeover of suspended telco Ziptel.
The former Ziptel will be resinstated for trading as Douugh (ASX:DOU) when the market opens for trading at 10am today.
Financial reports lodged with the ASX ahead of the relisting reveal that Douugh lost $1.29 million in FY2020, down from a $1.55 million in FY19. The group’s cash reserves decreased from $649,105 to $127,136.
Revenue increased from $729,609 in 2019 to nearly $1.42 million, including $129,000 from the government in Covid-19 support.
Pitching itself as a “next-gen neobank and AI-driven financial wellness app” Douugh raised $6 million series A round ahead of the float, including $750,000 from equity crowdfunding.
Douugh doesn’t have a banking licence, instead partnering with US-based Choice Bank, and locally, Regional Australia Bank, to offer financial products in a software-as-a-service model.
Founder and CEO Andy Taylor took a swipe at his competitors ahead of the listing saying: “most of the well-known neobanks are just rebuilding the same old banks in digital form – selling traditional products competing on price, reliant upon getting their customers into debt to turn a profit while outsourcing their software development”.
Douugh has been in beta in the US since mid-2019 and preparing for its full market launch in the coming weeks. In a partnership with Mastercard, it offers a debit card. It has yet to launch in Australia.
Taylor says his rivals have an “incredibly” capital-heavy approach.
“I’m not sure, in the end, how ‘neo’ it really is or whether it resonates with the Millennial and Gen Z target market. Our research shows that money management is the fundamental problem that needs solving in banking, and that calls for a new kind of business model,” he said.
Taylor says the funds from the raise will be used to build Douugh’s US customer base and invest heavily in R&D to improve our AI-driven banking platform with a longer term plan to expand into SME banking.
“What this means is we can offer a government-insured bank account and debit card just like a first-generation neobank, without the high cost structure, clunky business model and risk profile of becoming a licensed bank,” Taylor said.
Douugh remains headquartered in Australia.
At opening today, one seller is offering 1.34 million Douugh shares at 0.088 cents.
Founder Andy Taylor is Douugh’s major shareholder with a 31.89% stake of 191.6 million shares through his company The Digital Bakery.