Micro-investment app Raiz Invest gets set for $15 million IPO, with an eye on expanding to Asia
Thursday, May 10, 2018/
Micro-investment startup Raiz Invest has lodged its prospectus for a $15 million initial public offering (IPO), less than a month after it announced it would be changing its name from Acorns. But, according to chief executive George Lucas, the decision to go public was made with its existing customers in mind.
Lucas suggests the IPO, set for June, meets demand from Raiz’s customers, who he says want to own a part of the platform they’re investing through.
Accordingly, he says: “Part of the offering is a priority offering for existing customers”.
Shares in Raiz Invest will be offered at $1.80, with an expected market capitalisation upon listing of $119 million.
Lucas also suggests that being listed will offer a little extra reassurance, and, according to the prospectus, $4 million of the funds will be directed towards meeting regulatory requirements.
“We were a company looking after people’s money, ASX compliance is not going to hurt from that point of view as it will give comfort to the people using the platform,” Lucas says.
Some $5 million is earmarked for a bold overseas expansion plan, starting in South East Asia. Lucas says Raiz is already moving ahead in Indonesia and funding a partnership in Malaysia too.
“It’s very early stages,” Lucas says, “but it’s already rolling”.
Of the rest of the funds expected to be raised, the prospectus says $2 million will go towards staff entitlements; Lucas himself is set to receive a one-off cash bonus of $1 million.
Just over $2 million is set aside for working capital, something Lucas feels is particularly important, giving Raiz the flexibility to continue working on its product.
“Because we’ve grown so quickly, we need to keep a certain amount of cash, and to keep improving the product and attracting customers for the Australian market,” he says.
The final $2 million will fund re-branding and advertising, something that feels particularly pertinent following the company’s very recent rebrand from the Acorns name.
It was only in April that the startup decoupled from its US partner, the original US Acorns brand, and US Acorns became a minority stakeholder. But, Lucas says, despite the timing, that change was unrelated to the IPO.
“We’ve always had the IPO in mind, and these things take time, but the rebranding and the IPO were not linked — the rebrand was only linked to the deal in the US,” he says.