Insights

How does Raiz (ASX:RZI) stack up against its old friend Acorns?

It’s like comparing apples, oranges and Acorns, when it comes to these investing apps.
The post How does Raiz (ASX:RZI) stack up against its old friend Acorns? appeared first on The Motley Fool Australia. –

The latest news of US-based Acorns planning to go public through a SPAC merger has shone a light on its old Aussie friend, Raiz Invest Ltd (ASX: RZI). At the time of writing, the Raiz share price is trading slightly higher at $1.325, up 0.4%.

For the early investors and users of the micro-investing app, you would recall Raiz being known as Acorns. In January 2018, the Australian business ceased its joint venture with Acorns Grow Inc and rebranded to Raiz.

Raiz swiftly listed on the ASX five months later.

Now that Acorns plans to go public, we get to compare the two investing apps that stemmed from the same roots.

How the companies differ

Acorns and Raiz are similar in what they offer to customers – mobile-first micro-investing with a round-up feature which uses your spare change from purchases to invest.

Where the companies differ substantially is how they make money. Acorns derives majority of its revenue through a tiered subscription model, ranging from $1 to $5 per month.

Raiz uses a fee model tied to the account balance. In a way, this recurring monthly fee is like Acorns’ subscription model.

In theory, Raiz’s model should allow it to capture more revenue from its customer than Acorns as the account value grows to a monthly fee exceeding $5.

Another point of difference between Acorns and Raiz is size. Raiz was relegated to the Asia-Pacific region as part of an agreement with Acorns when their joint venture ended. A consequence is that Acorns holds a much larger market in the United States.

The by-product is Acorns boasts 4 million subscribers, while Raiz is hovering around 430,000 active customers. This user-base discrepancy translates to the companies’ funds under management (FUM) and revenue.

Acorns touted $4.74 billion in FUM at the end of April. Meanwhile, Raiz reported its FUM to be $737.56 million. Acorns’ revenue for the year ending 31 December 2020 came in at $71 million, while Raiz recorded $11.155 million.

How does ASX-listed Raiz compare?

The Raiz share price has remained mute today, finishing flat at $1.32. It seems the market was unfazed by the valuation attributed to Acorns.

Interestingly, while Acorns possesses a user base roughly 9.3 times larger than that of Raiz, and revenue that is approximately 6.4 times greater, the valuation doesn’t adhere to an equivalent ratio.

According to the slide deck, the SPAC merger with Pioneer Merger Corp has a pro forma equity valuation of US$2.151 billion. This is 25 times greater than the A$108.2 million market capitalisation of Raiz, based on its current share price.

There are many factors at play when it comes to a company’s valuation. This doesn’t necessarily mean the Raiz share price is trading at a discount. However, shareholders might find it interesting.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

Why the Raiz (ASX:RZI) share price is edging lower
What’s happening with the Raiz Invest (ASX: RZI) share price?

The post How does Raiz (ASX:RZI) stack up against its old friend Acorns? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!