Douugh builds on momentum with $8 million capital raise

Douugh builds on momentum with $8 million capital raise

Douugh founder and CEO Andy Taylor.

Digital bank Douugh (ASX: DOU) has announced an $8 million capital raise today, with funds to be used to capitalise on momentum built since the US launch of the company’s app in August.

Douugh says it has received firm commitments from investors for a placement of $5.5 million, and will also undertake a share purchase plan (SPP) to shareholders targeting $2.5 million, in total raising $8 million.

At a price of 7.2 cents per new share, the SPP represents a discount of 13 per cent to the 8.3 cents per share closing price of DOU on 1 December - the last trading day prior to today’s announcement.

The company says the money will accelerate the company’s growth in the US via investment in research and development and marketing initiatives.

Most of the funds ($4.7 million) will be used for marketing Douugh’s digital banking app in the US, while $2.1 million will go to R&D, $400,000 used for expenses of the placement, and $800,000 being held as working capital.

It comes a month after Douugh announced it signed a global banking-as-a-service partnership with embedded finance provider Railsbank to launch the Douugh app globally.

The deal will allow the digital bank to offer traditional core-banking services across the UK, Europe and Southeast Asia.

Douugh is also planning to first launch in Australia via Railsbank’s BaaS arrangement with Volt Bank - another digital bank - under which Railsbank will leverage Volt’s banking licence to offer services to Sydney-based DOU.

“We are delighted to have received this support from investors to be able to kick-off the AU integration with Railsbank and continue to build on the strong momentum we are showing in the US,” Douugh founder and CEO Andy Taylor said.

“In October we increased our US customer base by 42 per cent and revenue by 53 per cent month-on-month, with November providing to be just as solid,

“With the launch of our new Douugh Rewards offering this week in time for Christmas spending, the Crypto investing feature under development as well as a couple of major enhancements to the core product, we are well positioned in the coming months to further improve our activation rate to increase our revenue profile.”

It comes just under a month after DOU announced it saw record growth in October thanks to increased marketing activities.

The US customer base grew 42 per cent month on month, with US platform revenue up 53 per cent.

Douugh now boasts 63,162 customers on its platform, and has accumulated $15.5 million in customer deposits.

“We continue to see strong month-on-month growth in the US, which has accelerated following the launch of the integrated robo-advisory service and the dialling up of growth marketing initiatives, specifically the launch of our in app member-get-member service,” Taylor said.

“We see this growth continuing strongly into the future.”

Shares in DOU are down 12.05 per cent to $0.073 per share at 10.24 AEDT.

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