George Lucas

Raiz Invest Limited (‘Raiz’ or ‘the Company’) (ASX: RZI), a multi-award-winning micro-investing and fintech platform with operations in Australia and Southeast Asia, is pleased to provide an overview of its financial results for the fiscal year ended 30 June 2022 (FY22). This overview should be read in conjunction with the financial report for the year ended 30 June 2022.

Financial and investment highlights

All comparisons are for Year on Year (YoY) movements as at 30 June 2022.

• Total revenue for the Raiz Group up 39.5% YOY to $18.7 million
• Consolidated loss of $5,902,000 (FY21: $258,000) attributed to shareholders after adding back the cost of the employee share option and amortisation & depreciation expenses
• Normalised consolidated loss of $3,927,000 (FY21: $258,000) attributed to shareholders after adding back the cost of the employee share option, amortisation & depreciation, and contra advertising non-cash expense
• The Raiz Micro Investing Platform revenue up 52.2% YOY to $17.4 million
• Raiz’s Annual Recurring Revenue (run rate) up 21.5% YOY to $14.7 million
• Revenue per Customer (run rate, Australia) was up by 8.2% YOY to $55.90
• Global Active Customers up 42.8% YOY to 652,702
• Australian Active Customer up 6.1% YOY to 289,500
• Indonesian Active customers up 114.9% YOY to 253,420
• Malaysian Active customers up 66.3% YOY to 109,782
• Global Cost of Acquisition per customer was $13.1 for the year
• Global Funds under Management (FUM) up 18.1% YOY to $954.4 million
• Superannuation FUM up 74.6% YOY to $186.1 million (including Superestate acquisition)

Operational highlights

• Completed the acquisition of Superestate, boosting FUM and providing Raiz with the capability to offer residential property as an asset class inside and outside of superannuation.
• Invested $2.15m in the Malaysian operation alongside joint venture partner Permodalan Nasional Berhad. Raiz retains 70% of JV.
• Diversified media group Seven West Media (ASX:SWM) made a strategic investment in Raiz with a 6.6% stake for $10m, which was made up of $8m in advertising credits and $2m in cash.
• Raiz Rewards platform updated in Australia to offer more in-store rewards. Raiz Rewards is being rolled out in Indonesia and Malaysia.
• Raiz Kids product relaunched after a period of beta testing with select customers. Raiz Kids is being rolled out to Indonesia and Malaysia.
• Raiz won the Excellence in Wealth Management (including Personal Financial Management and Robo) Award at the FinTech Australia Awards.
• Australia Micro Investing Platform Gross Profit margin was 64%.
• Overall Group operating cash utilised was $2.8 million, with the Australian business remaining operating cashflow positive for the full year.
• Employee benefits expense increased 50% YoY with most of the increase due to a combination of new Superestate staff acquired, new hires, internal promotions and short-term bonuses paid in respect of the FY21 year.
• As of 30 June 2022, Raiz had cash, cash equivalents, and term deposits totalling $15.7m.

Strategy

Raiz has performed strongly in the FY2022 despite volatile markets, especially in the final quarter, as the pandemic, geopolitical tensions, rising interest rates and inflationary pressures took their toll on investor sentiment. All these factors were evident in the three regions where Raiz operates, Australia, Indonesia, and Malaysia, yet all three showed significant gains.

These challenging market conditions persist today, accordingly, and consistent with continual consideration of Raiz’s strategy, the Raiz board, has begun a formal process of reviewing the Company’s strategy. At the AGM the board expects to be able to present an updated company strategy to the market.

We continue to be a market leader, and this was illustrated in June at the FinTech Australia Awards that saw Raiz walk away with the Excellence in Wealth Management (including Personal Financial Management and Robo) Award. Raiz continues to be recognised for providing innovative, cost-effective and high-quality Investment and Wealth/Asset Management solutions.

Joint Group CEOs George Lucas and Brendan Malone said: “FY2022 saw Raiz encounter some challenging trading conditions. Despite these challenges and weaker investor sentiment, the business continued to grow in Australia and Southeast Asia as the Active Customer and FUM numbers attest.

“What it shows is that our strategy of customer first allows us to retain and attract new customers to Raiz even during challenging times. In Australia, we were particularly pleased by the increase in Superannuation FUM. Although this included the Superestate acquisition, we are encouraged that more Australians are entrusting us with their retirement savings.

“We are also proud of the Cost of Acquisition (CAC) we saw throughout the FY22. But in recent months we have not seen revenues increase as strongly as we have seen in the past. To combat this, we continue to closely monitor our expense base and make the appropriate decisions for the business.

“We need to thank the Raiz team globally for their commitment to the Company. They ensure we deliver the products and customer experiences that provides our customers with the best possible experience.

“Finally, to our shareholders, it has been a difficult year, especially the second half, so thank you for your ongoing support in our journey. We are committed to review the long-term strategy for Australia and Southeast Asia to ensure the company is focused on delivering value to its shareholders and stakeholders in the long term.”

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Alex Gao is an experienced financial executive. He has more than 15 years’ experience in accounting, finance and operations. As CFO, Alex will oversee the financial planning and board reporting, management accounting and other accounting functions.  He will also have oversight over Raiz’s  pre and post compliance of all trading functions.

Alex is a member of CPA Australia and holds a Master of Commerce from the University of Sydney, majoring in accounting and finance.

Alex joined Instreet Investment in 2012 as the finance and operations manager and has worked closely with Managing Director/Group CEO George Lucas since then.

He has also been a valuable member of the team, including Australian CEO & Group COO Brendan Malone and James Poon, Chief Product Officer & International, to grow Raiz since it began operations in 2016 under the Acorns banner.

Lucas says: “Raiz is delighted to announce Alex’s promotion to CFO. Alex joined Instreet before it was part of Raiz, and has contributed strongly to Raiz’s growth having been involved in all stages of the business from the beginning of an idea to where we are now.  We are confident Alex will continue to add value to Raiz and look forward to his success in the role.”

Gao says: “I am honoured to be appointed CFO of a company that is enjoying such strong growth not only in Australia, but also Malaysia and Indonesia. COVID tested the business but we have emerged a stronger and more competitive company, with a proven business model through the most difficult of times.  I am confident we have the right strategies and team for this growth to continue apace.”

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George Lucas

Raiz Invest, Australia’s largest mobile-first financial services platform, has opened a new investment channel – residential property – for its customers, with an agreement to acquire the holding company of the Superestate business via the issue of 5.3 million Raiz shares. Using a share price for Raiz of $1.7845 (sourced from a 10 day VWAP to 26 April 2021 inclusive), it values Superestate at $9.5 million.

Superestate, founded and majority owned by former Olympic swimmer Grant Brits who won a bronze medal at the 2008 Beijing Olympics, is a niche integrated superannuation and Australian residential property investment platform.

Brits and Superestate staff will join Raiz. The two businesses will continue to operate separately until an integration strategy that ensures the best outcome for all customers is implemented.

Raiz Invest Managing Director/Group CEO George Lucas says: “This acquisition, the first in our five-year history, marks an important milestone for the group by demonstrating organic growth is not our only option to increase funds under management (FUM) and Active Customers. Other acquisitions are on our radar as we actively look for opportunities in the Asia Pacific region.

“The acquisition provides tangible benefits to the customers of both financial services groups. Raiz secures the capability to offer residential property as an asset class in and outside superannuation in much the same way that we successfully introduced Bitcoin to our customers, giving them a means of investing in cryptocurrency.

“It also means $70 million of FUM in superannuation, 6,000 customers signed up and a residential property fund with eight houses under management can eventually be moved on to the Raiz platform.

“The acquisition also includes Vali, a property data & technology platform, which has a database of more than 13.5 million property valuations and is integral to the investment strategy of the residential property fund.  It will complement Raiz’s current data analytics capabilities as well as other products such as Raiz Home Ownership.”

Brits says: “For Superestate customers, they will benefit from the Raiz App investor reporting capabilities and other features that Raiz offers, such as Raiz Rewards, where cash backs from shopping online can be invested into superannuation.

“There are also mutual benefits with the acquisition allowing Raiz and Superestate to increase scale, further asset diversification, and operational and growth synergies, all of which will allow the combined group to grow at a faster pace.”

Raiz enjoyed a good performance in the March 2021 quarter with organic growth in Australia increasing by nearly 26,000 Active Customers in that quarter – about double the growth enjoyed in the first two quarters of the 2020-21 financial year. Australia was also operating cash flow positive in the quarter. At this run rate Raiz is on target to have $1 billion in FUM by the end of calendar year 2021.

Completion of the acquisition is subject to conditions including satisfactory completion of Raiz’s due diligence, the continuation of certain material contracts, escrow agreements in place, transfer of key employees, and Superestate being debt free. Completion is expected to occur in late May 2021. Raiz shares issued to the vendors of Superestate Pty Ltd will be subject to voluntary escrow of between 3 and 24 months and will be issued under Raiz’s placement capacity in Listing Rule 7.1.

This announcement was authorised by the Board of Directors.

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Moore, a digital marketing specialist who brings multinational board and governance experience to the role, focuses on growth companies with turnovers of between $10 million and $100 million.

Moore has a corporate career with director level marketing and general management experience across 30 countries, having successfully launched and grown Australian and global brands.

His non-executive responsibilities included the chairmanship of CROSSMARK Asia Pacific, owned by the private equity firm Warburg Pincus, and Chairman of the digital marketing company, The Now Communications Group, based in Singapore, and is an independent, non-executive director of the listed company, InvestSMART Group (ASX:INV).

Raiz Managing Director & Group CEO George Lucas said: “The appointment of Kevin, with significant marketing and general management experience in growth companies across Australia and Southeast Asia, comes at an important juncture for Raiz with the business expanding into Malaysia and Indonesia and the growth and consolidation of the Australian business.

“Management and the board are well positioned to take Raiz to the next level in Australia and Southeast Asia with the recent appointments of Brendan Malone as CEO of the Australian business, Kelly Humphreys as a non-executive director, and my increasing focus on the global business as MD/Group CEO.”

Moore’s appointment coincides with the resignation of Peter Anthony (Tony) Fay as a non-executive director and Chairman of Raiz effective 1 December 2020.  Tony joined the Board in October 2016  and played a key role in the Company’s early growth and IPO in 2018.  After four years, he has decided to resign from the board and to focus on other interests.

Lucas says: “Tony has made a significant contribution to the business through his experience of financial markets, management, product development, compliance and risk management. On behalf of the Board and management, I would like to thank him for his board leadership and wise counsel, and I wish him all the best in his future endeavours.”

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George Lucas

Raiz Invest, Australia’s largest mobile-first financial services platform, has welcomed the findings of a parliamentary committee that has rejected calls for an outright ban on screen-scrapping,  acknowledging that it found no evidence of consumer harm due to this practice.

The Select Committee on Financial Technology and Regulatory Technology, which handed down its report into the  FinTech and RegTech sectors today, said: “it is pertinent that ASIC has found no evidence of consumer harm as a result of these practices (screen-scarping).

“(We) consider that an outright ban on screen scraping is not prudent at the present time, and that, in many cases, these practices are enabling companies to innovate and provide competition in the financial services sector.”

Raiz Invest CEO George Lucas said: “This recommendation by the committee is an important step forward in allowing genuine competition in the Australian financial services sector.

“Although the committee acknowledged that it would take time for the Open Banking regime to provide a level of data quality and ubiquity that is available using digital data capture services, it also rightly pointed out that the correct place to address the issues associated with screen-scaping is within the ePayment’s code, which is currently under consideration by ASIC, due to its potential to significantly reduce fraud associated with online payments.”

In Raiz’s submission to the committee early this year, it strongly argued that the political and regulatory environment continued to favour a “Big Four” bank policy, a reality confirmed by the passing of the CDRs legislation.

“This means the playing field remains significantly skewed in favour of the ‘Big Four’ and the Apples and Googles of this world.  This position is only re-enforced by the CDR legislation.

“Today, the reality is that this bias is still the regulatory norm for our industry. But hopefully this report will be another catalyst for change that will encourage FinTech innovation in Australia that puts consumers first.”

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George Lucas

Raiz Invest CEO George Lucas says, “It is pleasing to report continued growth during May, with a 1.2% increase in active customers to 220,955 and a 6.9% increase in total funds under management to $433 million.

“This resumption of growth, in the past 2 months, is particularly pleasing as it follows dramatic market falls and significant volatility and economic uncertainty associated with COVID-19. There are now more active customers than at 29 February 2020.

“Net inflows into the Raiz Invest Super product have slowed as withdrawals continued due to the COVID-19 early release of superannuation.  In May 2020, $2 million in superannuation was withdrawn, following the $4 million that was withdrawn in April 2020.

The suspension of SuperMatch that was announced on 19 May 2020, by APRA and the ATO to address fraud, may impact the growth of Raiz Invest Super going forward. SuperMatch is part of the Company’s infrastructure enabling members to easily consolidate their superannuation online.

“The Southeast Asia expansion strategy continued to gather momentum with the granting of a licence for our Malaysian operation, as announced on 1 June 2020. This licence allows Raiz to immediately start marketing its product to this significant target market with a population of 33 million people.”

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George Lucas

Raiz Invest Limited (ASX: RZI) (Raiz or The Company) is pleased to announce the successful completion of a Placement of seven million fully paid shares at $0.86 cents per new share, raising a total of $6.02 million.

Pricing for the Placement was determined via an institutional bookbuild and the placement price of $0.86 cents represented a 9.5% discount to the last close price of $0.95 on 6 November 2019.

Raiz CEO and MD, George Lucas said: “We are very encouraged by the strong support for this placement from both existing and new institutional investors. Pleasingly, the placement was strongly supported by a cornerstone Indonesian Private Equity Fund, highlighting the potential to leverage the success of the existing platform in Indonesia, a strategic priority for Raiz.

“The funds from the Placement and SPP will be used for working and regulatory capital to support the continued growth of the business both domestically and in Asia.

“Since launching in 2016, the Company has made significant progress, with strong and consistent growth in both active customers which reached 207,824 and funds under management which reached $410.96 million as at 31 October 2019.

“Raiz is well placed to continue to deliver strong growth by capitalising on its well-established platform with multiple and diverse revenue streams across savings, investing, superannuation, spending, partnerships and advertising.

“There exists a favourable market opportunity in Australia with a highly engaged, diverse and rapidly growing customer base, along with the opportunity to cross sell new products and grow subscriber revenues”, he said.

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George Lucas

Raiz Invest Limited (ASX: RZI), Australia’s largest, mobile-first financial services platform designed to boost investing and savings in and outside of superannuation, has announced the active (paying) customers and total funds under management (FUM) update for September 2019.

Raiz Invest CEO George Lucas commented: “Raiz continued to deliver strong growth across all customer categories during September. There was also continued solid growth in FUM, in both retail and superannuation. Importantly in the 12 months to 30 September, superannuation FUM has more than doubled, increasing by 135.1%, while retail FUM grew by 42.6%, taking total FUM to close to $400 million.

“The growth in superannuation FUM is particularly encouraging and we have recently been nominated by SuperRatings for the 2020 Best New Innovation Award in superannuation. Although we are still a relatively small player, the continued growth is evidence that our superannuation offer is appealing.

“In relation to our expansion into Southeast Asia, we continue to make solid progress in launching in Indonesia and Malaysia. In Indonesia, we have integrated the payment gateway LinkAja which is an eWallet combining the government-owned telco and government-owned banks’ old eWallet into one eWallet product. In Malaysia, we have received conditional approval by the regulator and are working to launch the App in March 2020,” he said.

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George Lucas

Raiz Invest Limited (“Raiz” or “the Company”) (ASX: RZI), a first of its kind mobile-led, consumer focused, financial services platform, has provided an overview of its FY19 financial results for the year to 30 June 2019.

This should be read in conjunction with the annual financial statements to 30 June 2019.

FY19 highlights vs FY18

• Continued strong growth
  • Normalised revenue grew by 72.2% to $4.1 million ($2.4 million at FY18).
  • Active (paying) customers increased by 21.1% to 194,360 at 30 June 2019.
  • Funds under management (FUM) increased by 73.9% to $347.4 million including Raiz Super totalling $47.9 million.
• Execution of strategic initiatives
  • Continued growth in Raiz Invest Super.
  • Significant progress on the Southeast Asian expansion strategy with launch of App in Indonesia and joint venture partnership executed in Malaysia.
• Earnings
  • Total revenue for the 12-months to 30 June 2019 grew to $6.2m.
  • Normalised loss (adjusted for non-cash items) was $4.4m.
• Financial Position
  • Cash and cash equivalents of $6.8 m ($6.98m including term deposits with maturity greater than 90 days) as at 30 June 2019.
  • Non-current assets of $21.3m is mostly made up of goodwill and the Intangible Asset (the mobile first micro-investing platform).

FY20 update

• Positive momentum has continued in Q1 FY20 (as at 31 July 2019)
  • Total FUM reached $373.4 million in July 2019
  • Active customers increased to 199,433 in July 2019
  • Continued revenue growth in FY20 underpinned by fee increase from 1 August 2019
  • Australian business to be cash flow positive FY20
  • Indonesia expected to add revenue in Q2 FY20
  • Malaysia expected to add revenue in Q4 FY20

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George Lucas

Raiz Invest Limited (Raiz) has reached an agreement with Swiss Re Life & Health Australia Limited (Swiss Re) dated 22nd October 2018 (Agreement) to work exclusively with Swiss Re to jointly research and develop tailored and personalised superannuation insurance products using machine learning algorithms.

This will initially be for its Raiz Invest Super product.

The research and development process will use predictive modelling technology, powered by machine learning developed by Swiss Re. This will include co-developing a predictive underwriting model which aims to deliver a simpler underwriting experience for customers.

The aim is to develop a risk product inside superannuation that allows customers to have a personalised product, which is simple to apply for online.

Predictive modelling will give Raiz Invest Super the ability to offer a tailored life insurance solution for each customer with little additional customer information required.

The predictive model will be continuously assessed to ensure it delivers an improved, innovative experience for Raiz customers.

Swiss Re is the reinsurer of the group life insurance policy offered inside Raiz Invest Super. Both parties have agreed that for five years starting from the date of the Agreement (Exclusivity Period):

• Raiz will grant Swiss Re a right of first refusal to act as insurer or reinsurer on the super insurance product solutions developed during the Exclusivity Period for distribution in Australia, New Zealand and Southeast Asia; and
• Swiss Re will grant Raiz a right of first refusal to distribute the life insurance solutions that have been developed during the Exclusivity Period (and in accordance with the Agreement) for distribution in Australia, New Zealand and South East Asia.

George Lucas Managing Director of Raiz said: “A superannuation insurance solution based on predictive modelling will reduce the amount of information that needs to be provided by our customers to determine the appropriate premium for a given level of cover.

“Our goal is to provide a tailored solution to customers in superannuation in an innovative and efficient way instead of taking the one-size-fits-all approach of many group policies inside superannuation.

“This will be a first in Australia – an innovation for the market. Highly personalised superannuation insurance product solutions through the Raiz App will be as simple as answering a few easy questions.”

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