KUALA LUMPUR (July 8): Raiz Invest Ltd, an Australian financial technology company and publicly listed entity on the Australian Securities Exchange (ASX), has announced that it is ceasing its Malaysian business.
Raiz Malaysia Sdn Bhd is the company behind the Raiz mobile app that enables Malaysian investors to invest their spare change in unit trust funds. It is a joint venture company between Jewel Digital Ventures (JDV), a subsidiary of Permodalan Nasional Bhd (PNB), and Raiz Invest Australia Ltd, a subsidiary of Raiz Invest Ltd.
The announcement said following the completion of a strategic review of its Malaysian business, the joint-venture partners have agreed to close the business.
“The Malaysian entity has sufficient capital to fund the expenses relating to the closure with JDV having previously committed a further RM3 million to ensure a structured, coordinated and timely wind down process.
“A comprehensive and orderly closure process will be implemented in phases to ensure the secure and efficient handling of client assets.”
The Raiz mobile app was launched locally in mid-2020. A PNB press release published on July 23 that year said that it aimed to provide users with a convenient platform to proactively save and invest in Amanah Saham Nasional Bhd’s (ASNB) unit trust funds, initially made available exclusively for Maybank account holders.
Tan Sri Dr Zeti Akhtar Aziz, former PNB group chairman, shared that Raiz in Malaysia began when one of the firm’s young talents pitched his idea at the annual PNB Innovation Challenge. The person is Aidi Izham Mohd Khalil, CEO of Raiz Malaysia Sdn Bhd.
Raiz would later on broaden its offerings by allowing users of more banks to access the mobile app, adding more funds into its investment portfolios, including those offered by Abrdn, UOB Asset Management and Nomura Asset Management.
The mobile app also allowed users to schedule their everyday investments in small amounts and established partnerships with merchants to offer users with rebates upon purchasing specific items. Those rebates were then invested in unit trust funds via Raiz.
In February, Raiz introduced an updated version of its Raiz Kids feature which aimed to educate children about budgeting, saving and investing through hands-on experience.
Raiz’s official website shows that it charges RM1.5 per month (RM18 a year) for users with an investment amount of under RM6,000, and 0.025% per month (0.3% a year) for accounts with an investment amount of over RM6,000.
According to the CTOS report, Raiz Malaysia Sdn Bhd generated revenue of RM2.43 million for its 2023 financial year (FY2023), up 32.1% from the previous year. Its revenue for FY2022 came in at RM1.84 million and RM617,505 for FY2021.
The firm has been in the red in the past three financial years. It lost RM6.54 million in FY2023, 17.9% lower than a year earlier. Its losses for FY2022 stood at RM7.97 million and RM7.12 million for FY2021.
In FY2023, the firm had total assets of RM11.5 million and liabilities of RM2.2 million. It also has negative retained earnings of RM23.52 million.
In an email responding to The Edge on July 5, Aidi Izham said: “I acknowledge there are discussions concerning our business status. We are currently in the process of communicating with the relevant local regulatory authorities [on the closing of the business].
“Rest assured, our operations continue as usual at the moment. It is business as usual for our operations at this moment.”
It is also worth noting that PNB launched its robo-advisory solution RIA within its myASNB app on March 11 with the aim to make investing easy and accessible to all Malaysians.
According to PNB, RIA has garnered more than 60,000 users as at May 2, with more than RM6 million in total investments.