Neobank Douugh Ltd (ASX: DOU) is going to expand into buy now, pay later according to media reports.
What is the news?
The Australian Financial Review’s Street Talk, which is usually on the money, has reported that Douugh has signed an agreement to partner with an a buy now, pay later (BNPL) operator on the ASX with the aim of launching a BNPL product in the US.
Douugh is doing a $10 million capital raising to kick things off. Apparently there’s a $2.5 million investment by a strategic partner.
These new shares are supposedly being offered at $0.22 per share, which represents a 15.1% discount to the last closing price and a 22.2% discount to the average price over the prior five days.
Douugh will reportedly offer a $1,000 line of credit for customers that can be spent anywhere and will be repaid in six weekly instalments. The listed strategic partner will give the balance sheet funding and take on the credit losses to service the offering.
Summary thoughts
This is an interesting move. Only time will tell whether it leads to strong, profitable growth for the business or whether it’s just a headline-maker. There are already a number of BNPL operators growing in the US, so it’ll be tough to grab a material slice of the market share.
For me, in terms of exciting ASX growth shares, I’m attracted to Pushpay more because it’s already profitable, demonstrating impressive scalability and still growing fast.