2020 has been a big year for the fintech sector.
Namely, the ‘buy now, pay later’ industry.
Today though, Douugh Ltd [ASX:DOU] is hoping to show a new way forward. Becoming the first proper neobank to make its debut on the ASX.
Because if Douugh have their way, they may soon be a very big deal. Bigger than many are giving them credit for.
For now though, let’s take a look under the hood of the stock itself…
Small beginnings, big ambitions
First and foremost, Douugh is a very tiny stock.
Their current market cap is just $35.4 million. Granted, that in itself is nearly double their valuation at their IPO price.
Douugh managed to raise $6 million thanks to strong demand from investors. Issuing some 200 million shares at just 3 cents each.
Today, in their first day of trading, Douugh’s shares were trading at double that price. Opening at roughly 6 cents each, and even peaking at 6.7 cents at one point.
Currently, at time of writing, the DOU share price has pulled back slightly to 5.9 cents. But even so, that’s an impressive result for the company and its early shareholders. Not to mention an important indicator of the appetite from the wider market.
Suffice to say, it will be fascinating to see how Douugh fares in the coming weeks and months. Not just for their own sake, but the burgeoning neobank sector.
Only time will tell if they can become a genuine competitor to the traditional banks, or simply a fleeting fad.
Hunting down the next big fintech stock
The big question is, should you invest in Douugh?
Well, the answer is…maybe.
Frankly, it is hard to properly gauge how or what this neobank could become. Indeed, we have yet to see a neobank really step up and take on the bigger players. Some are coming close, but they’re not quite there yet.
In time though, with the right resources and initiatives it will likely happen.
It’s simply a matter of whether Douugh will be able to reach that point. And right now, with their ASX debut they are one step closer to that reality — but it is still a long way away.
For that reason, investing in a stock like Douugh is extremely risky. Especially with only one day’s worth of trading under their belt.
The market and investors are still trying to figure out how to value this neobank.
However, it is certainly a stock worth keeping an eye on.
If you’re looking for more direct fintech investment options though, we can help. Our latest report presents three fintech stocks that are primed to disrupt several major industries.
For Money Morning