In January, Raiz customers contributed a record $5.7 M to their Raiz Super accounts, DOUBLING monthly contributions made over the past 4 months.
Assuming, the average Super account size is around $25k, I have estimated LTV of $800k is being added through the Raiz Supe product per month to the business, and this is accelerating.
Raiz Super has very low customer acquisition costs, and if churn remains at the industry standard, could transform Raiz from a sub-scale investment platform to a +$1 billion FUM platform within 2-3 years.
Net loss of $2.4M, an improvement of 28% over pcp.
Revenue up 47%, an improvement of 47% over pcp, although a large management fee (under "other financial services") in H1 2018 conceals the businesses underlying growth. the micro investing platform revenue growht was in excess of 100%.
1) ARPC grew 76% over previous corresponding period, primarily driven by the maintenace fee increase in August (which doubled).
2) Active customers grew by 21% on pcp.
3) Average acc. balance grew 40% to $1813. Helped in no small mesure by strong market returns.
4) FUM increased 75% over pcp.
5) Raiz Super gaining traction, growing 125% over pcp. Raiz Super customers tend to be much sticke, with acc balanced 15x the averag acc balance.
6) Advertising Revenue grew 42% over pcp. The release of the Raiz bundll mastercard will enable bricks and mortar advertising, which may accelerate advertising revenue.
7) Indonesia - reports 40000+ sing-ups to the beta version of the app. targeting 1 million users in 3 years time ( equates $15 M revenue).
8) Malaysia - targeting 300k signups by 2024 (equates to $4.5 M revenue)
9) Launched insurance products, and a new portfolio incorporating bitcoin (wisely set at 5% max).
Good result, and on track to achievearound $9.2-$9.6 m for the fully year.
Going by App review data, Raiz is going to miss its growth targets for Indonesia by a significant margin.
App reviews grew by 107 over the month of March, which is a fall from 149 in February.
Raiz targeted 1 million Indonesian accounts within 3 years. Assuming the same review hit rate of 65 accounts per review, The number of reviews will need to hit the 15000 mark. I can't see that happening given the current progress.
I significant quation remains over the SE Asian expansion...........................
Disc. - I have sold out of my (small) RZI position.
31 MARCH 2020 (Q3 FY2020) QUARTERLY ACTIVITIES REPORT AND APPENDIX 4C
Raiz Invest Limited (‘Raiz’ or RZI), Australia’s largest mobile-first financial services platform, today announced an update for the three months to 31 March 2020 (Q3 FY2020).
In a quarter when COVID-19 has had a dramatic impact on global capital markets and businesses, our priority remains the health and well-being of our staff, customers and the broader community in which we operate.
The volatility in the capital markets has impacted on the value of funds under management (FUM) as well as the number of active customers, and Raiz has reacted quickly and responsibly to these unprecedented events.
Decisive steps have been taken to respond to the deterioration in the operating environment including a reduction in global operating expenses, a deferral of non-essential expenditure and optimisation of labour costs. On an annualised basis these cost reduction initiatives amount to ~$1.2m or ~8% of the total cost base.
Although the onset of COVID-19 may require an adjustment in the pace of execution of the growth strategy, the Company has continued to deliver positive momentum in many areas: revenue growth; progress in rolling out new products in Australia; growth in Indonesia; and further progress towards a Malaysian launch.
During the quarter, the Group delivered record normalised revenue from its Micro Investing Platform of $2.2m, representing 118.5% growth on Q3 FY2019 and 9.4% growth on Q2 FY2020.
Pleasingly during the quarter, the number of active (paying) customers increased by 15.3% to 215,398 compared to Q3 FY2019, representing an increase of 1.8% compared to Q2 FY2020. Furthermore, the rate of churn in customer numbers has stabilised during April 2020.
Operating cashflow was a negative $66,000 for the Group in Q3 FY2020. Operating cashflow was a positive $551,000 for the Australian operation, in Q3 FY2020, which excludes the investment and expenses of the Southeast Asian expansion. The costs associated with the Southeast Asian expansion were $617,000, in Q3 FY2020, driven by an increase in marketing and development expenses.
The Group remains well funded with cash, cash equivalents and term deposits totalling $11.5m as at 31 March 2020.
Raiz Invest Super grew by 75.2% to $66.25m compared to Q3 FY2019 and by 3.4% compared to Q2 FY2020. This was before the Government’s COVID-19 policy of allowing early release of up to $10,000 of superannuation funds in the 2020 financial year.
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Looks like brilliant growth versus the PCP last year (Q3 FY19), but much more subdued growth vs the previous quarter (Q2 FY20). It's still growth, but now much slower growth it seems. They also still have negative cashflow. Reminds me of SelfWealth (SWF) a couple of years ago. Funny thing is - RZI rose +24.44% today - and SWF rose +23.53%. "Risk On" again in FinTechs? Somebody is piling back in.
[Disclosure: I do not hold shares in RZI or SWF]
Raiz Invest CEO George Lucas says: “The rate of net churn in customer numbers stabilised in April 2020 with active (paying) customers increasing by 1.3% to more than 218,000. The better global market conditions saw our FUM increase by 8.9% to $404.62m. But due to the COVID-19 early release of superannuation, $4m was withdrawn from the Raiz Invest Super fund. The average early release was $7,139.
“With State and Federal governments starting to lift the social restrictions implemented to contain COVID-19, we will continue to build on these encouraging April numbers as the economy slowly starts to recover. Most of our customers have remained loyal to Raiz during these unprecedented times. This tells us they understand the benefits that we offer them and gives us confidence we have the right products to continue growing our active customers and FUM in the months ahead.”
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