Australian telco ZipTel buys up challenger bank Douugh
ZipTel, an Australian telecommunications firm, has acquired Sydney-based neobank Douugh.
The telco has entered into a binding agreement to acquire all the fintech’s outstanding shares and says it will change its name from ZipTel to Douugh once the deal is completed.
ZipTel will be issuing 500 million paid-up shares at a notional issue price of $0.02 per share to Douugh’s shareholders.
Another 500 million performance shares in ZipTel will also be offered to Douugh shareholders, converting into ordinary shares on a one-to-one basis after specific targets have been achieved.
Douugh, founded in 2016, focuses on using artificial intelligence (AI) to help customers get better insights on their money and build their wealth.
Users also have access to features like sending and requesting money, splitting bills, creating savings jars, and connecting all existing bank accounts and credit cards.
Douugh has an office in New York, and piggybacks off US-based Choice Bank’s banking licence and underwriting system. This means deposits are insured by the Federal Deposit Insurance Corporaton (FDIC) up to $250,000.
The fintech now wants to focus on scaling up its US customer base and grow its monthly recurring revenue, according to The Market Herald.
It has signed a second bank agreement with Regional Australia Bank, as well as signing a deal with Tokyo-listed financial services company Monex Group. The terms of these deals are unclear at this stage.
Looking ahead at its project road map, in the short-term Douugh wants to launch further AI-automation tools, as well as wealth management, cash rewards and instalment loan offerings.
Further into the future, it plans to become a financial identity and payments platform for its users.