Raiz Invest has grown funds under management by 20.2 per cent to $2.4 billion, as younger Australians continue to use the digital investment platform and existing customers build larger portfolios.
The Australian fintech recorded net customer inflows of $69 million in the three months to September 30, a 27.8 per cent increase on the previous quarter. Its active customer base rose 5.6 per cent over the year to 354,202.
Average account balances increased 13.8 per cent to $6,776, suggesting customers are investing more beyond the small deposits associated with Raiz’s round-up model.
Chief executive Craig Keary said the business had a “significant retail customer base skewing towards the younger investor demographic” and was receiving a steady flow of recurring net investments.
Raiz Invest attracts younger customers
The number of children using Raiz Kids portfolios climbed by almost a quarter over the past year to 73,957. Funds held in those accounts rose 42.7 per cent to $132.3 million.
The company’s entry-level Lite offering also gained traction, reaching more than 10,000 portfolios after growing 17.7 per cent in three months.
Raiz is attracting customers into more advanced products as their financial circumstances develop. Its superannuation offering now manages more than $500 million, while Plus portfolios have attracted $441.3 million.
Jars portfolios, which allow customers to organise investments around different financial goals, increased 67.2 per cent year-on-year to 46,729.
Annualised revenue per user rose 2.9 per cent to $86.69, giving the company scope to increase gross profit as its customer base expands without a corresponding rise in operating costs.
Transformation programme under way
Raiz is pursuing an overhaul launched in August under Mr Keary’s leadership, including plans to use artificial intelligence to engage with customers, refresh its market positioning and consider strategic acquisitions.
The transformation incurred $500,000 in one-off costs, but the company ended September with $15 million in cash, up 3.4 per cent from the end of June.
The review has also identified historical tax compliance issues. The board and management are conducting an external review and continuing discussions with regulators, with the company saying it will update the market as the process develops.
Raiz is progressing plans to offer access to US-listed shares and exchange-traded funds, with direct trading in Australian Securities Exchange-listed shares planned to follow.
