Aussie neobank Douugh lists on ASX ahead of US launch
Update (29/09/20, 15:42): Douugh reached out to FinTech Futures to say the listing date is no longer this week. The listing will now take place next week – week commencing 5 October, instead.
Douugh, a Sydney-founded neobank, is debuting on the Australian Stock Exchange (ASX) next week.
With plans to launch in the US following its listing, Douugh is floating just a week after fintech lender Plenti’s initial public offering (IPO) saw a poor uptake.
But founder and CEO Andy Taylor tells Financial Review that an over-subscribed pre-IPO offer of shares, which raised $6 million, gives him full confidence that the listing will go well.
“We’re just going to go. I don’t think you can get distracted by what happens on any given day, we’ve got a plan that we are executing on, and I think the timing is perfect for our proposition,” says Taylor.
“America, and indeed the world is in a pretty bad state, and needs help on the money management side, so now we’ve got the money to tell the world and scale up that message.”
The plan is to launch in the US before Christmas. Next year Douugh will launch in partnership with Regional Australia Bank. But for now, “the focus is very much on America at the moment”, Taylor told StockHead earlier this month.
What is Douugh?
Describing itself as “financial wellness platform”, as opposed to a neobank, Douugh currently offers banking services. It piggybacks off US-based Choice Bank’s banking licence and underwriting system.
Longer term, the start-up is hoping it can switch to a subscription-based offering.
Douugh’s app includes an autopilot feature. It uses machine learning to automate where funds get diverted. The automation, which can split deposits such as users’ salaries between multiple savings jars, is based on rules set up by the user.
Looking ahead, the challenger wants to launch wealth management jars. These would allow users to store their money in different investment portfolios selected by a US-based fund manager.
“This will allow customers to invest their money in risk-weighted portfolios, based on their goals,” says Taylor.
“We are not going to allow customers to single stock buy and speculate, we are going to build a plan based on the goal and put them in the right diversified portfolio for that goal.”
Reverse takeover of Ziptel
ZipTel, an Australian telecommunications firm, entered into a binding agreement to acquire all of Douugh’s outstanding shares in March.
Called a reverse takeover, the deal means a private company like Douugh can list on the ASX without having to organise and pay for an IPO. ZipTel, being a public firm, which no longer actively operates, makes this possible.
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. These will convert into ordinary shares on a one-to-one basis after specific targets have been achieved.