After an oversubscribed IPO round that closed in just a matter of hours, fintech startup Douugh listed on the ASX on Tuesday 6 October 2020 and has rewarded early investors with a return of up to 1633% if they managed to sell at its high. Hitting an intra-day high of $0.49 per share on Friday 16 October, Douugh’s share price increased by 16x after just 10 days.
Over 2,500 people had registered their interest on Equitise to participate in the IPO, purchasing shares at just $0.03. Before its September IPO, Douugh had also run a wholesale raise on Equitise in 2019 rewarding those earlier backers as well. The stock is currently trading at 30 cents a share, reflecting a 10x return for those still holding.
There's no denying that, especially in the wake of the Royal Commission, the neobank sector has been hot in the investment community. We've completed three raises for the first-cab-off-the rank Xinja - breaking equity crowdfunding records as investors line up to own a piece of the pie. This excitement around the disruption of the traditional banking industry is most likely a major reason in Douugh's listing success.
However, Douugh Founder, Andy Taylor, explains in a recent article with Business Insider that it might be more than that. Another reason for the skyrocketing share price could be that Douugh's taken a different route to other neobanks, partnering with local banks and skipping the lengthy process of obtaining banking licenses and the need to dive into lending on the mortgage side.
Taylor sees the opportunity, instead, in taking advantage of Australia’s new open banking regime and artificial intelligence (AI) to help customers.
“It has always been about asking how can we help people better manage their money and live financially healthier,” he said. “We’ll input all this data, train up the AI system to make your money work for you.”
“We have built that underlying platform and the next stage of that is for us to introduce wealth management into that and invest that money for you. And that’s what’s coming in the next six months.”
What is Douugh?
Douugh is an Australian purpose-led fintech startup, taking a proprietary artificial intelligence (AI) first approach to disrupting the business model of banking, helping customers live financially healthier. It operates a subscription based financial wellness platform, which helps customers spend wisely, save more and build wealth via a smart bank account and Mastercard debit card.
Douugh is not a licenced bank, therefore it is not forced into operating a traditional balance sheet model which is typically reliant on competing on price through the offering of traditional deposit and lending products such as credit cards, personal loans and mortgages. Instead, the company operates as a software and services business, charging end consumers fixed and variable fees.
Just a handful of wholesale investors were able to get in early for Douugh’s private round in 2019, where the company raised $130,000. This year, our limited IPO allocation of $750K filled in just a few hours with 75 lucky investors getting in early, reflecting the high demand to back this Aussie fintech trying to change the way we bank.
At Equitise, we’ve been fans of Douugh’s innovation for a number of years now. Led by Andy Taylor (Co-Founder of SocietyOne), Douugh is an exciting fintech prospect with a bright future ahead. With the funds raised from its IPO, Douugh is continuing to develop its market-leading technology with an intended US launch in the near future. If the first few days of trading are anything to go by, the company is certainly one to watch.