Fatfish Group completes capital raise and plans to further develop its fintech ventures

Fatfish Group ASX FFG iCandy VOPY Neobank
Fatfish Group has raised $1.5 million through an oversubscribed placement.

Technology venture investment firm Fatfish Group (ASX: FFG) has emerged from a self-imposed trading halt this morning to announce an oversubscribed capital raise to the tune of $1.5 million.

According to the deal’s lead manager, leading Melbourne-boutique Peak Asset Management, the raise received significant interest with over $7 million in offers received from new and existing investors.

Fatfish is considered an internet incubator, with a large number of companies in its investment portfolio including notable ASX debutants such as iCandy Interactive (ASX: ICI).

The group also owns 51% of Swedish-listed Abelco Investment Group AB, an investment group with operations in Scandinavia and South East Asia.

According to Abelco, its mission is to “deliver strong returns to our shareholders through a contrarian investment strategy executed via our venture building model”.

Deploying raised capital

With an additional $1.5 million on its balance sheet, Fatfish said it will utilise the funds to develop existing and new ventures, especially in the fintech area.

Notably, Abelco owns stakes in several companies that impact Fatfish’s position, given its large holding in the investment group.

The company’s investments also include Smartfunding and  Fatberry.com.

One of Abelco’s current investments is its neobank venture VOPY.

The rise of neobanks

Neobanks are banks that offer a range of services exclusively online while interacting with consumers through smartphone apps.

In 2018, Australia followed other countries including the United Kingdom and Germany in tweaking national legislation to make the industry more competitive and encouraging a new breed of fintech companies to rival traditional high-street banks.

Competitors in the Australian neobank sphere include Raiz Invest (ASX: RZI), Spaceship, Up, Xinja and Revolut.

The latest neobank to list on the ASX is Douugh (ASX: DOU), offering a novel service leveraging artificial intelligence (AI) that effectively manages people’s money, taking into consideration their pre-set spending and savings plans.

Douugh listed on the ASX via a reverse takeover of Australian telco ZipTel (ASX: ZIP) earlier this year, declaring that it would be operating a banking-as-a-service (BaaS) revenue model.

In real terms, it means Douugh acts as an appointed representative of an existing bank license holder, and can avoid the high-cost structure, business model and risks associated with becoming a licensed bank in each country it operates.

Additionally, Douugh penned a global partnership with Mastercard that will see the duo collaborating on various digital payment initiatives.

Douugh founder and chief executive officer Andy Taylor said his company is “very much a capital-light fintech business” and is currently building “a fully autonomous money and management assistant that will really help customers spend less, save more and build wealth over the long term.”

Another fintech company Abelco is focused on, and one that could be significant for Fatfish investors is Quickbit. Listed on the Nordic Growth Market, Quickbit is a cryptocurrency exchange that intends to profit from the growing adoption of cryptocurrencies.

The fintech start-up allows individuals to buy and pay for goods and services with cryptocurrencies and expects to grow strongly over time as cryptocurrencies attract wider attention and adoption globally.

Other investments

Abelco’s other notable investments are Smartfunding, a peer-to-peer lending platform that provides small to medium enterprises (SMEs) with alternative lending solutions by connecting them to investor pools.

The company also offers a proprietary peer-to-peer lending platform for investors and businesses and claims it allows individuals to invest as little as $100, to be able to generate returns of more than 15% per year.

Fatberry.com provides an online insurance marketplace in Malaysia that allows users to compare, customise and purchase online insurance plans in real-time.

The company claims it can generate insurance quotes “instantly” while allowing customers to obtain motor and travel insurance within three minutes.

The last company in Abelco’s fintech investment arsenal is Conax, a company that builds distributed ledger technologies (DLT) through what it calls a “multi-tenancy principle” – a feature that enables others to operate a secure neobank while splitting the ledger over different nodes to maintain security and viability.

Conax has stated it is looking to propagate “open banking”, which allows full transparency and ease of access, while securing the entire experience through blockchain and DLT technology.

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