Fintech Douugh poised for ASX debut after $6m capital raising
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Shares in Douugh could begin trading on the ASX in two weeks after the fintech closed its $6m capital raising on Thursday.
The company is listing via a reverse takeover of Ziptel (ASX:ZIP).
The buildbook for the raising was multiple times in excess of the $6m maximum, Douugh says.
Chief executive Andy Taylor, the co-founder of privately owned peer-to-peer lending platform SocietyOne, founded Douugh in 2017 and describes it as a wealth management and financial wellness platform.
“We typically get labelled as a neobank, but we’re not,” he told Stockhead.
Douugh plans to launch before Christmas in the United States, where the banking industry is “pretty archaic” and still adopting digital payments, making it ripe for disruption, Taylor said.
Many Americans are living paycheck to paycheck, and 70 per cent couldn’t afford a $400 emergency payment, he said. With savings deposit rates near zero, many find it hard to build wealth.
Douugh will help customers save by offering five different simple portfolios using exchange-traded funds (ETFs) from Vanguard and BlackRock, Taylor said.
“The banks business model is getting you into debt, they don’t want you building wealth.”
The platform is launching in the US in partnership with a community bank in Fargo, North Dakota, called Choice Bank.
Next year Douugh will launch in partnership with Regional Australia Bank, but “the focus is very much on America at the moment”, Taylor said.
The software-as-a-service (SaaS) company hopes to have 3 million customers in five years.
“We’re trying to build a pretty scalable global platform, starting in the US,” Taylor said.
The platform will allow tier 2 banks and financial organisations with “high-growth appetites” to extend their capabilities beyond their traditional reach, according to the company’s prospectus.
The SaaS solution is capital lite, with no capital holding requirements or restrictions on lending volumes, Taylor said.
Neobanks have had to offer unsustainable rates on savings deposits to attract customers, he added.
Douugh plans to introduce a variety of feature updates before introducing a monthly subscription fee.
In the long-term, the company will add banking for small and medium enterprises (SME) and adopt a platform business model with revenue share arrangements companies such as Transferwise, Lemonade and Coinbase.
The ASX has given Douugh September 17 as a target date, Taylor said.
Subject to shareholder approval, Ziptel will change its name to Douugh Limited and its ASX code will change from ZIP to DOU.