The Australian fintech space has been rapidly evolving the past few years, where on average most individuals across the country have in excess of 6+ fintech apps downloaded and used regularly on their phone.
Amongst the Australians that use fintech services, it has become a standard that they typically invest via apps such as Stake, Superhero or manage finances through banking apps like UP Banking, MyBudget and can even increase spending habits when needed with the help of BNPL providers like ZIP and AfterPay.
Right now, the majority of Australians still feel the financial stress and uncertainty brought on during the pandemic, with the younger demographic being at the forefront since this is the first economic downturn experienced so far in their adult lives. So with the anxiety looped in with unheard of interest rate hikes to fight inflation, people are seeing the value of their money erode right before them, prompting a call to action to get on top of and monitor personal finance through the help of fintech services.
Until today, a full-service fintech app covering every service segment was non-existent in Australia. But in an attempt to foster financial wellness via a single application, consumer fintech Douugh (ASX: DOU) has launched the first phase of its beta ‘Super App’ centred around micro-investing while focusing on helping customers save and invest on their finances.
“I am delighted to announce the soft launch of the first phase of our financial super app in Australia. We believe the time is right to lean into our responsible micro-investing service that will help everyday Australians adopt the right money habits to live financially healthier lives in a time of great economic uncertainty,” said Founder & CEO, Andy Taylor.
The move to employ a one-stop shop and service all aspects of personal finance in Australia comes after a questionable US android app launch. The failure abroad, which consumed an obscene amount of marketing expenditure for little return, saw the company abandon ship and pivot strategy from cash burn habits that would eventually cannibalise the Company from the inside out.
As per its FY22 annual report, Douugh booked a loss after tax of $11.6 million for the year, down from $13.5 million, all against a total of $580k in revenue.
On the edge of giving up on its endeavours to pivot towards a profitability, the Company was able to refocus its value proposition following an R&D tax credit of $2.22 million to push an Australian launch of its platform, claiming to have removed all the weaknesses and faults learned while operating in the US.
The first feature to be rolled out in this beta launch and showcased as its most compelling pitch point, is the setup of a recurring micro-investing savings plan via the Company’s proprietary Autopilot feature included in the app.
Hoping to provide additional wealth for its customers, the Autopilot feature invests in a set of risk-weighted diversified portfolios that will be managed by Blackrock. They will also charge app users with ongoing monthly fees for the micro-investing service.
With its showcase app that aims to help promote financial stability, the Company itself seems far from it and can’t even overcome its own struggles to turn a profit, forcing them to elongate existing capital reserves for as long as possible. To reassure shareholders that they aren’t a joke, the goal is to generate income from; monthly recurring account fees, trading and transaction fees, currency conversion and interest from cash balances.
In recent times, investors have been able to construct their own tailored portfolio with lower trading costs and asset flexibility with the birth of Exchange Traded Funds (ETFs). Following a spike in usage seen in Australia, the affordable investment vehicle to provide passive income, many investors didn’t want to build their own portfolios through individual stock pickings, prompting the birth of micro-investing.
Micro-investing is the act of making small and irregular investments from everyday transactions to be allocated towards ETFs that are held in your portfolio. The ease of this is done via fintech apps that connect your bank account offering to invest it on your behalf. Investing small sums irregularly and regularly will cause a sizable accumulation over time. In Australia, the biggest names offering the product are Raiz, Commsec Pocket, First Step and Shareies.
Being in the ‘watch and learn’ phase over the next few months, mainly focusing on the uptick of its service, Douugh stated its sights are locked on a full-market launch that will hit Australians in the first months of next year (Q3 FY22).
“Exciting times are ahead for our customers, team and shareholders. Investors can look forward to seeing strong revenue growth on a leaner cost base from Q3 FY23 onwards, as we plot a course to cash-flow breakeven.”
In the last 18 months, Douugh shares have tracked lower, much lower, falling 91% from its highs of $0.49 to $0.02 at market close.
Trading Desk Assistant at Emerald Financial
Latest posts by Jack Cornips (see all)
- UNITH delivers eSocial Worker for public health services across 14 countries - December 5, 2023
- Novatti cashing out of Reckon investment, clears debt to simplify payments business - November 17, 2023
- Novatti seizes opportunity in Australia’s cashless transition as revenues rise while expenses drop - October 30, 2023
Leave a Comment
You must be logged in to post a comment.