How does Raiz Make Money? | Business Model Explained

Raiz is a popular investment platform that helps people to invest in the stock market, exchange-traded funds (ETFs), and other investment options. Founded in 2015 in Australia, Raiz has quickly become a popular choice for people who want to start investing but don’t have the knowledge or experience to do it on their own. But how does Raiz make money?

In this article, we will explore the different ways that Raiz generates revenue and helps to keep the platform running smoothly.

How does Raiz Work

How does Raiz Work

Raiz works by making investing simple and accessible for everyday Australians. The platform uses a range of innovative features to automate the investment process and make it easy for users to start building their portfolios.

Here’s how Raiz works:

  1. Sign up and link your bank account

To get started with Raiz, users need to sign up for an account and link their bank account. This allows Raiz to track their transactions and round up purchases to the nearest dollar, which is the core feature of the platform.

  1. Round-up purchases

Once a user’s bank account is linked, Raiz starts tracking their transactions and rounding up purchases to the nearest dollar. For example, if a user spends $4.50 on a coffee, Raiz will round up the purchase to $5 and invest the extra 50 cents in a portfolio of ETFs.

Users can also choose to set a recurring investment, where a fixed amount of money is invested into their Raiz portfolio on a regular basis. This can be done weekly, fortnightly, or monthly, and can be adjusted at any time.

  1. Choose a portfolio option

Raiz offers a range of portfolio options, ranging from conservative to aggressive. Each portfolio is made up of a mix of ETFs, which are selected based on the user’s risk tolerance and investment goals.

Users can choose from one of the pre-selected portfolios, or they can create a custom portfolio by selecting their own ETFs. Raiz also offers socially responsible investing options, which allow users to invest in companies that align with their values.

  1. Monitor and manage investments

Once a user has started investing with Raiz, they can monitor their investments and track their progress through the platform’s dashboard. Users can see how their portfolio is performing, view their transaction history, and make adjustments to their investments as needed.

Raiz also offers investment advice and insights to help users make informed decisions about their portfolios. This includes personalized investment recommendations based on the user’s goals and risk tolerance, as well as market insights and educational resources.

  1. Earn rewards and cashback

In addition to investing spare change and recurring investments, users can also earn rewards and cashback through Raiz’s partnerships. Raiz has over 400 partner companies, ranging from retailers to insurance providers, who offer commission on purchases made through Raiz.

Users can also earn additional cashback through Raiz Rewards, a premium feature that offers higher cashback rates and exclusive rewards for users who pay a monthly fee.

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History of Raiz

Raiz, formerly known as Acorns Australia, was founded in 2015 by George Lucas and Brendan Malone. The platform was launched with the aim of making investing more accessible to everyday Australians, particularly those who were new to investing or had limited funds to invest.

The founders were inspired by the success of the US-based investment app, Acorns, which had launched a few years earlier and had quickly gained popularity with millennials. The app allowed users to invest their spare change into a portfolio of ETFs, making investing simple and affordable. The founders saw an opportunity to bring this concept to Australia and created Acorns Australia, which later rebranded to Raiz.

The platform launched with a simple round-up feature, where users could link their bank accounts and have their purchases rounded up to the nearest dollar, with the difference automatically invested in a portfolio of ETFs. The idea was to make investing a habit, by removing the need for users to actively think about investing and instead making it an automatic process.

The platform quickly gained traction, with over 100,000 users signing up within the first six months of launch. The founders also secured a partnership with one of Australia’s largest banks, Commonwealth Bank, which allowed Raiz to offer its services to Commonwealth Bank customers.

Over the years, Raiz has continued to develop and expand its platform, adding new features such as one-time and recurring investments, a range of portfolio options, superannuation options, and socially responsible investing. The platform has also expanded into other markets, launching in Indonesia in 2018 and Malaysia in 2019.

In May 2018, Raiz went public on the Australian Securities Exchange (ASX), becoming the first Australian fintech company to do so. The initial public offering (IPO) raised $15 million, which was used to fund the platform’s expansion and development.

Since then, Raiz has continued to grow its customer base, with over 1.8 million users as of 2021. The platform has also expanded its partnerships, with over 400 partner companies offering commission on purchases made through Raiz.

In 2020, Raiz also launched a premium feature, Raiz Rewards, which offers users additional cashback rewards when they make purchases with Raiz’s partner companies. This feature is available to all users, but premium users receive higher cashback rewards.

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Today, Raiz is one of Australia’s leading investment platforms, offering a simple and accessible way for people to start investing. The platform has continued to innovate and expand, with new features and partnerships being added regularly, and it is expected to remain a major player in the Australian fintech industry for years to come.

Now, let’s take a look at how Raiz makes money.

How does Raiz Make Money

Management fees

Raiz Management fees

One of the main ways that Raiz generates revenue is through management fees. When a user invests in a Raiz portfolio, they are charged a management fee based on the size of their investment. The management fee is calculated as a percentage of the total value of the user’s portfolio and is charged monthly. The exact fee depends on the portfolio that the user has chosen, but typically ranges from 0.275% to 0.2755% per annum.

While management fees might seem like a small cost, they can add up over time, particularly for users with larger portfolios. For example, if a user has a portfolio worth $10,000, they would pay a management fee of $27.50 per year. If they had a portfolio worth $100,000, the fee would be $275 per year.

Partner commissions

Another way that Raiz generates revenue is through partner commissions. Raiz has partnerships with a range of companies, including retailers, travel companies, and financial service providers. When a user makes a purchase with one of Raiz’s partner companies, Raiz receives a commission on the sale. The commission is usually a percentage of the total purchase price, and the exact amount depends on the partner and the product.

Partner commissions can provide a significant source of revenue for Raiz, particularly as the platform grows and more users make purchases through its partners. However, it’s worth noting that Raiz is transparent about its partnerships and the commissions it receives. Users can see which companies Raiz has partnerships with and how much commission it receives on each sale.

Interest on cash balances

When a user invests in a Raiz portfolio, any cash that they haven’t invested is held in a cash account. This cash account earns interest, which is another way that Raiz generates revenue. The interest rate on the cash account is currently 0.05% per annum, which is not a particularly high rate, but it can still provide a small source of revenue for Raiz.

Premium features

Raiz also offers a range of premium features for users who want to access additional tools and information. These features include access to financial advisors, access to a wider range of investment options, and the ability to set up recurring investments. These premium features are only available to users who pay a monthly fee, which provides another source of revenue for Raiz.

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The monthly fee for premium features varies depending on the level of access that the user wants. For example, the “Raiz Rewards Plus” package costs $3.50 per month and provides access to additional investment options and personalized investment advice. The “Raiz Super” package costs $2.50 per month and allows users to invest in a range of superannuation options.

Raiz competitors

Raiz competitors

Raiz operates in the competitive Australian fintech industry, and as such, it has several competitors that offer similar investment services to consumers.

Some of Raiz’s competitors include:

  1. Spaceship Voyager – Spaceship Voyager is a Sydney-based startup that offers a range of investment options, including shares and exchange-traded funds (ETFs). The company’s investment philosophy focuses on investing in companies that it believes will shape the future.
  2. Stockpot – Stockpot is an Australian investment app that uses algorithms to provide users with personalised investment advice. The company was acquired by Raiz in 2020, allowing Raiz to expand its product offerings to include personalised financial advice.
  3. CommSec Pocket – CommSec Pocket is a mobile app offered by Australian financial services company, CommSec. The app allows users to invest in a range of ETFs and provides educational content to help users make informed investment decisions.
  4. Stockspot – Stockspot is a Sydney-based startup that offers a range of investment options, including managed funds and ETFs. The company uses algorithms to create customised portfolios for users based on their risk tolerance and investment goals.
  5. Superhero – Superhero is an Australian investment platform that allows users to invest in shares, ETFs, and managed funds. The platform charges a flat fee per trade and offers educational content to help users make informed investment decisions.
  6. SelfWealth – SelfWealth is an online brokerage that allows users to invest in shares and ETFs. The platform charges a flat fee per trade and offers social features that allow users to connect with other investors and share investment strategies.

Raiz Funding, Revenue & Valuation

Raiz has experienced significant growth since its launch in 2016, and the company’s funding and revenue reflect its success in the Australian market.


In 2015, Raiz (then known as Acorns Australia) raised $2 million in seed funding from local investors. In 2016, the company secured an additional $6.8 million in a funding round led by Australian financial services firm Westpac Banking Corp.

Since then, Raiz has raised additional funding through a combination of debt financing and equity crowdfunding. In 2019, the company raised $15 million in debt funding from Australian asset manager Sargon Capital, which allowed Raiz to expand its product offerings and grow its user base.

In 2020, Raiz raised $6.5 million through a fully-underwritten entitlement offer, which was used to further accelerate growth and expansion plans. The funds raised were used to acquire a financial advice platform, Stockpot, which allowed Raiz to offer personalised advice to its customers.


Raiz generates revenue primarily through its management fee, which is charged to users based on the amount of money invested in their portfolios. The management fee ranges from 0.275% to 0.2755%, depending on the size of the user’s portfolio.

In addition to the management fee, Raiz also generates revenue through its partnerships with over 400 companies in Australia. These partnerships allow Raiz to earn commission on purchases made through its platform, which is then shared with users in the form of cashback rewards.

Raiz reported revenues of A$10.3 million in 2020. The company has continued to see strong growth in its user base, with over 500,000 registered users as of 2021.


Raiz is a privately held company and has not disclosed its valuation to the public. However, based on its funding rounds and revenue growth, it is estimated that the company’s valuation is in the hundreds of millions of dollars.

In 2019, Raiz was listed on the Australian Securities Exchange (ASX) through a reverse takeover of listed company Acorns Grow Australia. The listing allowed Raiz to raise additional capital and expand its shareholder base, but it also subjected the company to increased scrutiny and regulatory requirements.


Raiz is a popular investment platform that allows users to invest their spare change into a diversified portfolio of ETFs. The platform generates revenue through a range of sources, including management fees, partner commissions, interest on cash balances, premium features, and a referral program.

While some of these sources of revenue might seem small, they can add up over time and help to keep the platform running smoothly. As Raiz continues to grow and attract new users, it’s likely that the platform will continue to develop new sources of revenue to support its expansion.

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