Neobank small-cap Douugh Ltd [ASX:DOU] is on the up today.
The $19.55 million market cap stock is trading 5.71% higher at the time of writing. The share price is rising on the back of news of a new feature being rolled out to users in order to help revenue growth.
It’s bound to be a nice reprieve for long-term investors but does little to ease the 80% drop in the stock over the past year. It’s a result that showcases just how volatile and hungry for growth this end of the market can be…
Can ‘Roundup’ save Douugh?
Today’s rollout of Roundup by Douugh is their answer to budget constraints on American households.
Effectively, through the Douugh app, card transactions will now round up to the nearest dollar amount. This rounded up sum will then be moved to the ‘Stash Jar’ on the platform. In doing so, users will have an automatic savings tool for emergencies or future spending.
As CEO Andy Taylor explains:
‘We are delighted to announce the launch of our new Autopilot feature Roundup, as we further optimise our focus to the needs of the mass market segment of gen-z and millennials who are struggling to budget their day-to-day expenses.
‘Alongside Early Pay, this is the one of the most commonly requested features customers have been asking for in order to commit their paycheck to Douugh and spend using their debit card. Critical drivers of our revenue model.
‘This is the launch of yet another initiative to aid in the activation and revenue generation of our existing customer base as we take stock of the current market environment and investor sentiment to chase top line growth, leveraging the engaged community we have built to date to deliver a blended lower cost per acquisition.’
So if Roundup genuinely is the difference between users committing to Douugh or not, this may be a pivotal addition — one that could not only help stem the share price bleeding but also deliver on the growth investors are hoping for.
Time will tell how things shape up.
What’s next for Douugh?
What might be the more interesting detail in today’s update from Douugh is their approach to new users. Rather than continue to spend big on trying to lure in fresh customers, management is looking to focus on ‘activation and revenue growth’.
What this likely means is that less money will go towards marketing, and more towards development of the platform — not to mention potential increased spending on their sales team.
As for whether this is the right decision to make at this moment, time will tell.
For investors, though, it is certainly a factor that should be considered. Particularly as it seems management is painfully aware of the overall performance of the share price.
In terms of trends, though, Douugh may simply be out of luck. Fintech stocks have seemingly fallen off the radar a little compared to other sectors. And when it comes to tech, one of the more exciting themes of late lies in the metaverse…
Yes, VR, AR, and more are all big innovations set to disrupt our world — all of which has the potential to revolutionise the Internet and digital experiences as we know them.
That’s why, if you haven’t already, it is time to start preparing for it. And for the best place to start, check out our ‘deconstruction’ report. It’s an insightful look at what is happening in the metaverse, which companies are the driving forces behind it, and how you could make a tidy sum by investing in it.
Read up on everything metaverse right here.
Regards,
Ryan Clarkson-Ledward,
For Money Morning
