Seven West Media has taken a 6.6% strategic investment in financial services platform, Raiz Invest Ltd in a $10 million deal.
The investment will cost Seven (ASX:SWM) $2 million in cash, with the balance made up of $8 million worth of advertising on Seven’s media platforms.
Seven’s stake in Raiz is at $1.617 a share.
Raiz Joint Group CEO, Brendan Malone said Seven’s backing was strong endorsement of Raiz’s business model. The mobile-first fintech recently hit the benchmark of $1 billion in Funds under Management earlier this month. The micro-investing app started out as as Acorns and launched in 2016. It targets the 18 to 35 age demographic.
Malone said the company is now looking to scale up in the next 12 to 24 months with a major advertising push via Seven.
“Since launching nearly six years ago, we have largely grown organically and by using paid social media to acquire customers. Our cost of acquisition for customers (CAC) has been, on average, less than $12 for a paying Raiz customer, an industry-beating CAC. We have helped more than 500,000 young Australians save and invest over this journey,” he said.
“With Seven we will be able to re-engage with many of these customers as well as expand our reach to a fresh audience and explain why Raiz is an excellent product for them for saving and investing in and outside of superannuation, even if they have broking accounts or high interest saving accounts with other organisations. We are not an either-or product.
Seven West Ventures head Alan Stuart lauded Raiz as a disruptive digital player they’ve tracked for nearly six years.
“Raiz is an exciting strategic investment opportunity with significant disruptive growth potential in the finance sector, both domestically and internationally,” he said.
“We have followed the Raiz story since launch and have been very impressed by what founders George Lucas and Brendan Malone and their Raiz team have achieved scaling the business.
“Similar to previous strategic investments, we believe by leveraging the power of our media assets across SWM we can help drive that next leg of growth for Raiz, building greater brand trust, awareness and adoption across Australia.”