Neobank Douugh debuts on the ASX, US launch imminent

Neobank Douugh debuts on the ASX, US launch imminent

Neobank Douugh (ASX: DOU) is the first of its kind to list on the ASX after debuting this morning following an oversubscribed $6 million capital raise.

Founded in Sydney by CEO Andy Taylor (pictured), the company is one of many next-generation 'neobanks' established to disrupt traditional means of banking and target Millennial and Gen Z customers.

The company's core product is its AI-powered smart phone app and bank account that the company hopes will allow its customers to take control of their financial wellness, helping them save more and spend wisely.

The debut on the ASX comes just weeks before the group is set to launch the app in the US, with an Australian launch to come in 2021.

Douugh is one of many Australian neobanks on the market, joining established players like Volt, 86 400 and Xinja.

Taylor, the founder of P2P lending platform SocietyOne, says Douugh is an evolution of the neobank concept, taking it beyond just simply rebuilding a banking platform on a slick-looking app.

"Most of the well-known neobanks are just rebuilding the same old banks in digital form selling traditional products competing on price, reliant upon getting their customers into debt to turn a profit while outsourcing their software development," says Taylor.

"This is an incredibly capital-heavy approach and I'm not sure, in the end, how 'neo' it really is or whether it resonates with the Millennial and Gen Z target market.

"Our research shows that money management is the fundamental problem that needs solving in banking and that calls for a new kind of business model."

The company's banking platform utilises the banking licences of its partners to deliver core banking services; in the US the banking platform is Choice Bank's, while Regional Australia Bank will power Australian bank accounts.

While customers will have access to a Mastercard-baked bank account, Douugh hopes to attract customers with its financial management prowess.

Douugh sorts users' monies into categories called "jars", putting funds away at payday for bills and user-made savings goals for things like holidays or that new couch they've been eyeing off.

The company's imminent US launch follows entering into a partnership with Mastercard in 2019.

Taylor says the choice to list before its launch was made to capitalise on the strong growth opportunity in the US before launching in Australia and beyond.

"We will use our IPO funds to scale up our US customer base and continue to invest heavily in R&D to improve our AI-driven banking platform," says Taylor.

"We are laser focused on helping people better manage their money, with our long-term goal to become a fully autonomous financial control centre for our customers, which may eventually see us expand into SME banking."

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

From pandemic side hustle to multi-million dollar business: Meet Ling Fung
Partner Content
Ask any parent, and they’ll tell you: preparing for a new baby is no easy task.&n...
Metro Baby
Advertisement

Related Stories

After October lull and a record Black Friday-Cyber Monday weekend, what's next for retail?

After October lull and a record Black Friday-Cyber Monday weekend, what's next for retail?

Just as the Australian Bureau of Statistics (ABS) announced month-o...

Super funds add an extra $30m to Morse Micro Series B

Super funds add an extra $30m to Morse Micro Series B

Sydney-based Morse Micro has tacked on an additional $30 million to...

Health tech VALD raises $37.5m as Canada’s Vistara Growth backs push into North America

Health tech VALD raises $37.5m as Canada’s Vistara Growth backs push into North America

Brisbane-based health tech company VALD has raised US$25 million ($...

APRA intensifies scrutiny of Medibank after major cyberattack

APRA intensifies scrutiny of Medibank after major cyberattack

The Australian Prudential Regulation Authority (APRA) has intensifi...