Fintech company Raiz Invest looks to $15 million through IPO

Raiz Invest, the micro investment platform formerly known as Acorns Grow Australia, has lodged its prospectus with the Australian Securities and Investments Commission (ASIC), looking to raise $15 million through an initial public offering (IPO).

Priced at $1.80 a share with shares scheduled to begin trading on June 21, the IPO will value the company at just under $120 million.

Since its launch down under in February 2016 as a joint venture with Acorns US, Raiz has had 440,000 users sign up, growing to 155,000 active monthly customers and has $170 million in funds under management.

Though users can also invest recurring or lump sums, the service’s main gambit is rounding up and investing the ‘spare change’ of users – say the 50 cents change from a $3.50 coffee rounded up to $4.

The company’s rebrand came this past January, with Acorns US becoming a minority shareholder of Raiz Invest Australia as local fund manager Instreet Investment Limited took a majority stake. With this move, Raiz has also been permitted to expand into select overseas markets, with the funds raised from the IPO set to help the company grow into Indonesia, Malaysia, and Thailand.

The majority of its users are millennials, with 70 percent aged between 18-35. Almost two thirds of its users are male, with 37 percent women.

As well as expanding further across Australia and into markets across Southeast Asia, Raiz also has plans to grow a superannuation product, Raiz Invest Super.

George Lucas, Raiz Invest Managing Director, said of the name change, “After our recent agreement with Acorns, we felt a new name was an important step forward.

“The change reflects our new autonomy and our ability to move quickly to develop and implement product improvements that are responsive to our customers in the Australian market. This resulted in our recent announcement of the introduction of a superannuation product.”

According to the prospectus, the company generates revenue through maintenance fees, account fees, netting, and third party advertising and marketing leveraging Raiz’s data. The majority of revenue comes from the maintenance fee, $1.25 charged monthly.

Raiz charges 0.275 percent in account fees monthly for balances of $5,000 or more; though the company stated this currently represents the smallest proportion of revenue, it expects this to grow significantly as it launches its superannuation product and more accounts grow past $5,000.

Image: George Lucas.