Seven West Media has taken a 6.6% stake in mobile-first financial services platform Raiz, a micro-investing app, via a $10 million share placement.
Payment will be split between $2 million in cash and the equivalent of $8 million in advertising across Seven’s broadcast television, publishing and digital media assets.
Seven west CEO James Warburton: “Raiz is a disruptive digital player that is targeting a huge market opportunity. Combining Raiz’s consumer offering, which has widespread appeal, with SWM’s scale and audience reach provides a significant opportunity to grow the business and is a strong fit with the strategy of our Seven West Ventures group.”
Head of Seven West Ventures Alan Stuart: “Raiz is an exciting strategic investment opportunity with significant disruptive growth potential in the finance sector, both domestically and internationally.
"Similar to previous strategic investments, we believe by leveraging the power of our media assets across SWM we can help drive that next leg of growth for Raiz, building greater brand trust, awareness and adoption across Australia.”
Raiz, which has funds under management in Australia of $1 billion, will use Seven's media reach for an advertising campaign to accelerate growth in the Australian market. The app typically allows users to round up a purchase by a few cents, adding this money to a user's fund account.
Raiz Joint Group CEO, Brendan Malone, said: “This investment by Seven into the Raiz business is a strong endorsement of Raiz’s business model and management’s ability to execute.
"After extensive discussions with Seven, we have concluded that its media assets and reach are an excellent means to promote Raiz’s products and services to achieve the accelerated growth we require.
“Since launching nearly six years ago, we have largely grown organically and by using paid social media to acquire customers. Our cost of acquisition for customers (CAC) has been, on average, less than $12 for a paying Raiz customer, an industry-beating CAC. We have helped more than 500,000 young Australians save and invest over this journey.
“With Seven we will be able to re-engage with many of these customers as well as expand our reach to a fresh audience and explain why Raiz is an excellent product for them for saving and investing in and outside of superannuation, even if they have broking accounts or high interest saving accounts with other organisations. We are not an either-or product.
“We are excited to be working on new creative campaigns that can not only be used in Australia but in the Southeast Asian countries where we operate, determining a media strategy in conjunction with Seven to maximise our reach, and building brand stock that will not only accelerate growth in the next one to two years but put us in a good position to continue our growth trajectory beyond this.”
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