Raiz’s Australian FUM pushes above $1 billion
Raiz Invest, Australia’s largest, mobile-first financial services platform designed to boost investing and savings in and outside of superannuation, announce that funds under management (FUM) have pushed above the $1 billion mark it set in November 2021.
By the end of Raiz’s Q2 FY22, FUM was $1.034 billion, up 6.6% on the prior quarter figure and 70.8% higher on a YOY basis. Within this total, Superannuation FUM has more than doubled over the past 12 months, with this component jumping by 136% YOY to $191 million.
The achievement of $1 billion FUM milestone in part reflects sustained growth in average balances per customer, with the latter metric now just under $3,000. But importantly, it also reflects an ever-expanding client base, with the Raiz business model, products and brand now having helped more than 500,000 Australians invest and save.
Senior management of diversified media group, Seven West Media acknowledged the continued scaling up of the Raiz business when recently announcing its move to take a strategic 6.6% stake in the Company.
Raiz reported normalised revenue of $4.5 million during its Q2 FY22 reporting period, which was up 7.0% on the prior quarter level. This revenue metric was up 82.9% on that for the same quarter in the prior year.
The company’s Annual Recurring Revenue (run rate) also rose during the quarter, advancing by 6.5% to $14.5 million. This was up 91.1% on a YOY basis.
On a quarter-on-quarter basis, Raiz’s Australian Paying Customers increased by around 1% to 291,205, while Investment Accounts rose by 3% to 567,069.
Cash receipts from customers of $5.0 million in the Q2 FY22 period were up 1.9% on the level reported in the previous quarter (Q1 FY22: $4.9 million). Total cash inflows from operating activities for the quarter of around $174,000 was up on the Q1 FY22 figure of near $121,000.
Raiz looks in solid shape, ending the December 2021 quarter with $20.5 million in cash, cash equivalents and term deposits.
Overseas continue to climb
Raiz has continued to grow its overseas market operations. During Q2 FY22, Active Customers in Indonesia grew by 26.9% to 206,708. Active Customers in Malaysia rose by 18.9% to 97,079. These gains provide early evidence that Raiz’s move to invest in Southeast Asia is gaining traction, despite the cultural difficulties so often seen as growth impediments to Australian companies expanding into this region.
Strategic investment by Seven West Media will help fund growth initiatives
In late November 2021 Raiz announced that diversified media group, Seven West Media had made a strategic investment in the Company.
SWM took a 6.6% stake in Raiz via a $10 million share placement. The investment was priced at RZI’s 10-day VWAP of $1.617. Payment for the $10 million investment included a $2 million cash component, which will go towards funding Raiz’s multi-faceted growth strategy.
Raiz will receive the remaining $8 million in the form of advertising across Seven’s broadcast television, publishing and digital media assets. The latter have a combined reach of more than 18 million Australians.
SWM’s move to become a major shareholder in Raiz has effectively aligned the interests of both companies. The reach of SWM’s media assets will provide the Company with the perfect vehicle to promote the Raiz brand as well as its ever-expanding products suite. It is expected that this will, in turn provide impetus to key growth metrics in the Australian market segment. In partnership with SWM, Raiz is planning to both re-engage with its existing client base and promote its financial product offering to potential new customers looking to save and invest in and outside of the confines of superannuation.
Raiz Managing Director/Joint Group CEO George Lucas said, “We are delighted with the satisfactory growth delivered by both our Australian and Southeast Asian operations over the final part of calendar 2021. This expansion occurred despite further bouts of economic uncertainty created by the ongoing COVID-19 global pandemic.
“Two notable events stood out in our December 2021 quarter reporting period. The first was Raiz group FUM pushing above the $1 billion mark. This continued growth and ongoing gains in other key metrics like global paying customers clearly demonstrate the attractiveness of our product offering to a wide spread of investors across multiple market segments. The second event was Seven West Media coming on board as a major shareholder. The latter group’s investment in Raiz provides us with the means to promote our product range to potential new customers. It is also a clear vote of confidence for the Raiz business model and strategy.
“As calendar 2022 gets underway, we remain confident that investments made over the past 12 months will help us maintain growth momentum both in Australia and our Southeast Asian markets. At the same time, we continue to be on the lookout for additional growth opportunities. Some of these will be sourced from enhanced product offerings that meet the demands of our existing client base. Others are expected to come out of additional growth by acquisition opportunities that will over time further broaden and deepen the make-up of our customer base.”
Joint Group CEO Brendan Malone said, “We are well pleased with the performance of Raiz Invest’s Australian business over the latest quarter, particularly in the context of a persistent COVID-19 pandemic which continues to distort Australia’s broader economic performance and the proper functioning of its financial markets.
“Despite the broader economic challenges, the last three months of calendar 2021 saw Raiz’s Australian business deliver solid customer growth, as our product suite further penetrated the retail and superannuation market segments. At the same time, we have never lost sight of the importance of continued engagement with our existing client base. The latter focus was central in our average balances per customer metric rising to nearly $3,000 by quarter’s end.”
