Raiz shutters Malaysia arm

ASX-listed microinvestment platform Raiz will close its Malaysia arm after four years in market, the firm’s joint venture partners have confirmed to the Australian Securities Exchange (ASX) today.

Raiz Invest managing director and chief executive Brendan Malone said the decision to close its Malaysia arm – which follows a “strategic review” of the business by joint venture partners the Malaysia-based Jewel Digital Venture (JDV) and Raiz Invest Australia – would enable a refocus on and strengthening of its core Australian operations.

“With our continued product innovation and our marketing campaign, we are confident the Raiz Australian business will continue to grow and deliver a strong economic performance for shareholders,” Malone said.

The closure of its Malaysian business comes just four months after Raiz offloaded its Indonesia arm, citing a similar focus on scaling its core Australian operations.

The firm signalled in its 2023 Full Year report (released at the end of August last year) its intentions to divest its equity positions across its Southeast Asia business, including its Indonesia and Malaysia arms. At the time, Raiz said it was finalising a new restructuring agreement that would move it to a license-based brand and technology agreement with these global entities.

The firm said it is also seeking to move to licenced agreements, rather than direct ownership, for its expansion ventures in Thailand and Vietnam.

Raiz said the exit from Malaysia would have no impact on the profit and loss outcomes of its main Australian operations; its now defunct Malaysian arm will be classified as ‘discontinued operations’ in its financial report, Raiz said.

Following a steady retreat from its all-time high of $2.03 a share in August 2021, Raiz’s share price has, since late 2023, plateaued to around $0.40 a share, today sitting at $0.37.

Raiz debuted its Malaysia arm in mid-2020 in partnership with Malaysian banking juggernaut Maybank, promising its users a “convenient platform to proactively save and invest in ASNB” variable price funds; ASNB is the wholly owned unit trust company of the Permodalan Nasional Berhad (PNB), one of Malaysia’s largest fund management companies.

A unique, and indeed core, feature of the Raiz platform is to automatically invest users’ ‘virtual spare change’ that is generated from daily purchases.

The Raiz Malaysia service was restricted to Maybank account holders.

Raiz confirmed that its Malaysian entity maintains sufficient capital to fund the expenses relating to its closure with JDV committing further funds 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 firm said in its filing to the ASX.

As at the end of August 2023, Raiz counts more than 685,000 customers globally, with around 296,000 active customers in Australia – a figure largely unchanged since mid-2021.

Globally, the platform holds AU$1.15 billion in funds under management, with AU$1.3 billion held by its Australian arm.