Raiz pumps up earnings, pockets $2m investment

Micro-investor platform Raiz Invest has detailed a healthy set of numbers in delivering its full-year financial results, highlighted by a 19 per cent jump in revenue year-on-year to $21 million that flips a $2.4 million loss in 2023 into a $1.3 million EBITDA.

And in separate cash-building news, the company also pocketed $2 million via a placement at a 9.3 per cent premium to Friday’s closing price from international investor, State Street Global Advisors. As part of a bigger $4 million capital raising, the investment will secure a 4.8 per cent share of the company for the US-based giant.

Raiz Invest managing director and chief executive officer Brendan Malone.

Raiz’s 2024 performance was bolstered by a series of strategic moves, including divesting its Indonesian business interests and setting the stage for exiting other South-East Asian markets by June next year. In reducing employee expenses by 14 per cent to $5.2 million and other costs related to the overseas markets by 21 per cent to $2.4 million, the company has been able to increase gross margins by 4 per cent to 68 per cent.

Further detail in the financial report revealed today shows that the average revenue per Raiz user recorded a substantial rise of 16 per cent to $70, while funds under management (FUM) increased 23 per cent to $1.4 billion and the number of active customers rose by 4 per cent to 306,000.

‘We are pleased to see positive momentum with strong revenue growth, increased engagement with customers, positive operating cash flow and positive EBITDA.’

Raiz Invest managing director and chief executive officer Brendan Malone

Management’s commitment to aggressively expand its new product offerings underpinned its FUM growth.

Raiz Plus, a platform that allows customers to better curate their investment portfolios, has boomed 66.4 per cent to $177 million, while the company’s specialist superannuation program increased 28.1 per cent to $288 million.

Suggesting a tendency for customers to be focusing on longer-term investments for themselves and their children, Raiz Kids’ FUM surged 121.4 per cent to $44 million at the same time as its newest directive, Raiz Property delivered a 32.4 per cent FUM increase to $27 million.

Additionally, the company is in the final stages of developing a white-label product, which is being built as a wholesale solution for the wealth management industry and is aimed at further diversifying its revenue streams.

As of the end of June, Raiz had $9.7 million in cash and no debt, giving it a comfortable financial cushion and, according to management, the potential to look for merger and acquisition opportunities.

Raiz Invest managing director and chief executive officer Brendan Malone said: “In the past year, our focus has returned to our core Australian operations and we are pleased to see positive momentum with strong revenue growth, increased engagement with customers, positive operating cash flow and positive EBITDA. We expanded our product suite and our customers are increasingly utilising multiple products, leading to higher account balances and FUM.”

According to management, the collaboration with State Street Global Advisors – the fourth-biggest asset manager worldwide, with US$4.42 trillion (AU$6.55 trillion) under management – is expected to drive new product innovations, especially into exchange traded funds (ETFs) and improve the financial literacy of its customer base.

Raiz’s fintech platform has largely driven micro-investing in Australia. Launched in 2016 out of a perpetual licence agreement with US-based Acorns, the company allows users to invest spare change from everyday purchases into a diversified portfolio, making investing accessible to everyone.

With four consecutive quarters of positive operating cash flow now under its belt, culminating in a net cash inflow of $3.6 million, Raiz is certainly proving the huge value and scalable advantage of a software-as-a-service (SaaS) model.

Sitting on a total cash pile of almost $14 million post-placement, a current strong positive cash flow with burgeoning growth in both customers and FUM, the company appears set for a stellar 2025 financial year.

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