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Surge in new  customers drives five fold lift in Raiz Invest profits

Innovative micro-investor platform provider Raiz Invest has delivered a stellar December half-year report with revenue up 14 per cent to $11.6 million compared to the previous corresponding period, translating into a booming 579pc lift in EBITDA to $706,000.

Raiz has developed a cutting-edge app, which has opened a new market for micro-investors by turning everyday spending into smart investments.

By rounding up tap-and-go purchases to the nearest $1, $2 or $3, the platform channels spare change into a personalised investment fund - automatically putting money to work in the stock market.

Raiz says its active customer count spiked 9pc to 317,995 users by the end of December and is still climbing with 325,380 active users on its books as of yesterday.

Funds under management also surged 32pc to an impressive $1.61 billion, fuelled by strong new customer cash inflows that were up 256pc to $106m.

Integral to the company’s underlying EBITDA performance, Raiz reported a positive operating cashflow of $1.56m for the half. The key metric, which is now into its sixth quarter of growth, has put the company well on the way to sustainable profit.

The business model was also supported by strong cash in the bank, which has nearly doubled to $12m, helped along by a successful $3.9m capital raise in August from 9.5 million shares issued at 41 cents per share.

Increased interaction with customers and an improved cross-marketing strategy using AI-driven data analytics have been big drivers of the company’s growth, which management says has locked the business into acceleration mode.

To prove the point, the company says an 8pc rise in average revenue per user to $74.29 is strong evidence these strategies are paying off.

Raiz says that as the customer base continues to expand, engagement is clearly reaching more deeply across its core product range.

The number of Raiz Plus portfolios - a product that gives customers more control of their individual investments - jumped 49pc while its Kids portfolios grew 42pc and the company’s Superannuation offering saw a 26pc uptick in customers.

The increased client numbers also boosted funds under management in each sector. The total value of the Super product increased 33pc to $331.1m while the Raiz Plus pot skyrocketed by 89pc to $246.2m.

More impressively, the total value of the Kids investment portfolios more than doubled, up 103pc to $60.6m, suggesting a strong interest from younger investors to create long-term wealth.

One of Raiz’s key moves in the past six months was to strike up an alliance with global asset manager State Street Global Advisors to help raise its brand awareness and develop new white label products for future strategic partners and financial groups.

The deal has also improved new product development particularly in the retirement income space. As a broader ambition, both parties see the Raiz platform as a smart way to improve financial literacy among its less experienced customers.

The company, meanwhile, has been busy developing new platforms to grow user options. Raiz Plus fund clients can choose from 150 individual share and ETF options to personalise their investments, while Super customers can now also personalise their retirement portfolios.

Raiz has also been growing its rewards business model – a way of transferring retail loyalty points into investable cash – with cashback and investment options available through 57 separate merchants.

In line with the company’s earlier decision to minimise ongoing losses, Raiz has completed its exit from its South East Asian operations after writing a final cheque of $672,000 to the liquidator of Raiz Malaysia. The company has now drawn a line under its turbulent overseas adventures.

With a strengthened balance sheet, a growing customer base and a pipeline of innovative financial solutions, Raiz appears well-positioned to capitalise on its highly scalable technology and cement a leadership spot in the digital wealth management sector.