Raiz Invest to list on ASX with a $120m valuation

Raiz Invest, the micro-investment fintech, has lodged a prospectus with the corporate regulator for a June float in a deal that will value the start-up at around $120 million.

As flagged by The Australian Financial Review’s Street Talk column last week, the initial public offering for Raiz, formerly known as Acorns Grow Australia, will raise just over $15 million. The shares, which have an offer price of $1.80, are due to begin trading on the ASX on June 21.

The offer has been fully underwritten by Bell Potter and is understood to be two times oversubscribed with strong support from institutions in Hong Kong. Raiz has plans to expand in south-east Asia, and already has an office in Indonesia.

Raiz has 155,000 active customers in Australia, growing at around 20 per cent each quarter, and approximately $170 million in funds under management. Its revenue is driven by the number of users rather than the amount of FUM.

Raiz charges users a flat fee of $1.25 per month, which provides 70 per cent of revenues. Balances over $5000 are charged a fee 27.5 basis points, which makes up 9 per cent of revenue; the rest comes from advertising and ‘netting revenue’, which offsets brokerage.

The smartphone application is based on a similar product in the United States and has been operating locally since February 2016. It allows customers – mostly millennials – to “round up” purchases and automatically invest the “spare change” into exchange traded funds. The technology allocates fractional interests in ETF units, allowing users to open an account with as little as $5.

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Source: Raiz Invest to list on ASX with a $120m valuation | afr.com