Raiz Investment Australia Limited Business Model Analysis

The given report is based on the financial technology company named Raiz Investment Australia Limited (RZI) based in Australia. The report deconstructs their business model, examines the key success factors and analyses the different downside risks that the company is exposed to. Certain changes to the business model of the company along with recommendations on the same have also been provided.

Running head: THINK BIG
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Name of the Student
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Executive summary
The given report is based on the financial technology company named Raiz Investment Australia
Limited (RZI) based in Australia. The company offers unique services to the customers and a
wide range of portfolios to choose from. The report deconstructs their business model, examines
the key success factors and analyses the different downside risks that the company is exposed to.
Certain changes to the business model of the company along with recommendations on the same
have also been provided.

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Table of Contents
I. Introduction..............................................................................................................................3
II. Business model.....................................................................................................................3
Building blocks............................................................................................................................4
Interrelationships.........................................................................................................................9
Critical success factors..............................................................................................................10
Downside risks...........................................................................................................................10
Business model changes............................................................................................................11
III. Conclusion..........................................................................................................................11
IV. Recommendations...............................................................................................................12
VI. Appendices..............................................................................................................................15
Appendix 1.................................................................................................................................15
Appendix 2: Financial statements..............................................................................................17
Profit and Loss Statement..........................................................................................................17
Cash Flow Statement.................................................................................................................17
Financial Position Statement.....................................................................................................18

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I. Introduction
Any business functioning in the external environment needs to have a definite business
model which will assist it in ensuring that all the operations of the firm are carried on effectively.
The company which has been chosen for the given assessment is the Raiz Investment Australia
Limited. The Raiz Investment Australia Limited Company is an Australian based award winning
financial technology company which permits the different customers to make a micro investment
of the round upped value of an item which has been purchased (RZI Share Price, 2018). The
company currently has 160000 active users with approximately $200 million funds under its
management. The company is registered under the Australian Stock Exchange with the name
ASX: RZI. The CEO of the company is George Lucas and has been managing the company quite
well. Moreover, the company made a profit of around 1.04 million dollars as of 2017. The
company fucntions through a mobile application which is available on Android as well as iOS
platforms (Raiz App., 2018). The company works automatically and any purchases made online
will be rounded up and the extra roundup shall be invested into the spare change up the exchange
traded funds. The given report will be deconstructing the business model of the firm followed by
the critical success factors and probable down risks.
II. Business model
The company charges a subscription of 5$ to its customers and allows them to invest the
extra money from their rounded up purchase into the exchange trade markets. The company has
an official website through which it deals with the different customers and the profile of the
owners are also largely available on the website (Kiel, 2014).

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Building blocks
The business model`s nine blocks approach comprising of the details of the RZI`s
business model has been given in the Appendix.
Customer segments
The different customer segments which the company aims to target are as follows:
 White collared smartphone users: Who are interested in investing their funds in the
exchange trades
 Affluent individuals: Who can invest a certain percentage of their funds (Armstrong et
al., 2015).
 Merchants: Who can invest their profits
 Online retailers: This covers business men who are involved in online business and like
to invest their money.
 Students- Who have saved their pocket money can invest in these portfolios.
The company has different portfolio offerings for different consumers and the consumers
can invest in it as per their convenience.
Key partners
For the key promotion and networking purposes the key partners of RZI are as follows:
 Networking groups- These networking groups like LinkedIn and Facebook tend to assist
the company in ensuring that the sources help the company to attract investors.
 Outsourced Engineering teams- These teams can be paid in order to increase the bond
between the different consumers and make the online activity efficient in nature.

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Value proposition
The value proposition which is offered by the application is:
 It allows easy investment by depositing the extra rounded up money into the exchange
trading.
 It allows online money transfers
 It permits users to invest their money without additional efforts and from anywhere at any
point of time.
 It offers various portfolios which can be invested in as per the needs of the different
individuals.
Key activities
The company allows easy investments to the different customer segments. Using these
services there are five major types of investments which a company can make:
Conservative
Moderately Conservative
Moderate
Moderately aggressive
Aggressive
Emerald

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Figure 1: The different portfolios being offered by the company (Source: Raiz App., 2018).
Moreover the customer can choose from Round up services, Recurring deposits and
Lump Sum investments as per their need.
Channels
Channels can be described as the process which can be adopted by the firm to make the
products available to the different consumers. The different channels which are used by the
business are as follows:
Application
The company has a well-developed application through which the consumers can make
sound investments. This application can be accessed easily at any time and this helps in ensuring
that the other online activities which are the payments and purchases being made can be accessed
easily.
Online website

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The online website of the company provides every necessary information that an
Investor needs to know about the company in order to ensure that the investor can built in trust
and check their calculations and aimed investments and savings.
Social media presence
The social media presence of the company is also very strong and using these mediums
the customers can successfully gain extensive knowledge about the company and the services it
tends to offer to the different consumers (Massa & Tucci, 2013).
The application is the most popular channel which the company makes use of and allows
the investors to make quick and sound investments.
Revenue streams
The primary revenue system of the company is based on the following aspects:
 Subscription fees: These subscriptions are made by the customers who want to invest
regularly. An average fees of $5 has to be made by the consumers.
 Commission; the company also earns through the commission received on investments.
This commission is received from various sources like the investors and the companies as
well.
 Advertisement fees: The Company also earns through advertisement fees of various
partners and companies alike.
Cost structure
The cost structure of the organization is based on the registration fees and other
infrastructural charges as incurred by the organization. The organization pays a regular app

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development fees, pays networking fees and others. The following comprise of the costs of the
firm:
1. Technology/ Infrastructure
2. Subsidy
3. Market research
4. Advertisement
5. HR (Zott, Amit & Massa, 2011).
6. Integration and Customization
7. Taxes
Key resources
The key resources of the firm are as follows:
Well connected application: The application is the primary infrastructure available of
Governmental body connections- The Company has business relationships with the security
exchange board which serves useful registration procedures to the chosen organization.
Office space in Australia- This office is the registered office of the company (Sinkovics,
Sinkovics &Yamin, 2014).
Good will of the company: The Company has a good name in front of the different consumers.
Human resource management as assets. They are the managers who tend to look after the
investments made by the different customers.

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Customer relationships
In the financial technology company the customer relationship tend to play a huge role in
the business organization. For this purpose, the company maintains accurate customers through
the follows:
Website customer care service
The company has a specialized section, where the different customers can contact the
company.
Chat services
The company also provides live chat services to the different consumers.
Social media channels
The social media channels also serve as an important source of information for the
company and it helps them to maintain sound relationships with the customers.
Interrelationships
The different blocks of the business model are highly interrelated. This can be stated
because any change in one of the components of the business model shall bring about a change
in the other components as well. In the same manner, if the cost structure of an organization goes
through a change then the revenue streaming shall also be affected accordingly.
Moreover, thus linkage is considered to be one of the most important linkages and tend to
ensure that the company is able to earn higher amounts of revenues.
The key resources of the company are also related to the revenue streams and cost
structure of the organization (Hong & Fauvel, 2013). Moreover, the customer relationships and

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the customer segments are also related to one another and tend to determine the success of the
business enterprise.
In the same manner, the key resources, key partners and other value propositions of the RZI are
deeply interrelated which tends to ensure that the organization succeeds in the long run.
Critical success factors
They critical success factors of the business are as follows;
1. The online application of the company is very useful as it can be used effectively at any
time and the company can make purchasing decisions efficiently.
2. The purchased upped value- The manner of investment which has to be made by the
consumer is one of the success factors (DaSilva & Trkman, 2014). As the company
automatically ups the value of the purchase and invests the balance into stocks, this
concept is greatly liked by the customers.
3. Wide range of offerings- The portfolio offered by the consumer is very large and
different consumers can make the purchases according to their convenience and budget.
Downside risks
The different downside risks which are associated with the business are as follows:
Financial market crash
In case the financial market crashes and the values of the company which are enlisted in
the portfolios of the fin tech company tends to go down, then the business may take a toll.
Reduction in online purchases

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As the company ups the purchases that have been made by the consumers and rounds
them off consistently the company can suffer a huge blow if the online purchases as made by the
company, decreases adequately.
Business model changes
I would have made quite a few number of changes to the business model of the company.
Some of these changes are as follows:
Customer segments: The customer segments of the organization can be increased considerably.
The company can target the new young retired individuals and encourage them to register under
the firm (Bocken et al., 2015).
Key Partners: The key partners of the firm can be increased and it can take in various
supermarkets, e-commerce websites and other retailers under its umbrella to ensure long term
success (Carayannis, Sindakis & Walter, 2015).
Revenue Streams: The revenue streams and sources of the business can increase by partnering
with the different retailers.
III. Conclusion
Hence, from the given analysis it can be stated that the organization has been very
successful in its domain and has converted the investment into the financial markets very easy by
rounding of the up purchases as made by the consumers. The company has won various awards
for it and this has led to the competitive positioning of the company.

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IV. Recommendations
The recommendations are as follows:
Customer segments can be extended
The company can increase the promotional activities in order to ensure that it attains
success in the business domain.

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V. References
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education.
Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to
develop sustainable business model archetypes. Journal of cleaner production, 65, 42-56.
Carayannis, E. G., Sindakis, S., & Walter, C. (2015). Business model innovation as lever of
organizational sustainability. The Journal of Technology Transfer, 40(1), 85-104.
DaSilva, C. M., & Trkman, P. (2014). Business model: What it is and what it is not. Long range
planning, 47(6), 379-389.
Hong, Y. C., & Fauvel, C. (2013). Criticisms, variations and experiences with business model
canvas.
Kiel, I. H. (2014). Entrepreneurial marketing.
Massa, L., & Tucci, C. L. (2013). Business model innovation. The Oxford Handbook of
Innovation Management, Oxford University Press, Oxford, 420-441.
Raiz App. (2018). Retrieved from https://raizinvest.com.au/important-documents/
Raiz App. (2018). Retrieved from https://raizinvest.com.au/partnerships/
RZI Share Price | Raiz Invest Limited (ASX: RZI) | SharePrices. (2018). Retrieved from
https://shareprices.com.au/company/au/asx/rzi
Sinkovics, N., Sinkovics, R. R., &Yamin, M. (2014). The role of social value creation in
business model formulation at the bottom of the pyramid–implications for
MNEs?. International Business Review, 23(4), 692-707.

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Zott, C., Amit, R., & Massa, L. (2011, July). The Business Model: Recent Developments and
Future Research. Journal of Management, 37(4), 1019-104.

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VI. Appendices
Appendix 1: Business Canvas Model of RZI
Key Partners
Networking groups
Outsourced
engineering teams
Key Activities
Conservative
Moderately
Conservative
Moderate
Moderately
aggressive
Aggressive
Emerald
Value
Proposition
Wide portfolio
choices
Easy to use
Money transfer
Automatic
purchased
rounded up
Customer
Relationships
Through live
chats
Application
help
Social media
channels
Customer
Segments
White
collared
smart phone
users
Merchants
Affluent
Groups
Students
Key Resources
Application
Office space
Good will
Channels
Website
Application
Social media

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Cost Structure
Technology/ Infrastructure
Subsidy
Market research
Advertisement
HR
Integration and Customization
Taxes
Revenue Streams
Subscription fees:
Commission;
Advertisement fees:

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Appendix 2: Financial statements
Profit and Loss Statement
Cash Flow Statement

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Financial Position Statement