Douugh Ltd (ASX: DOU) shares are currently in a trading halt.
What’s Douugh? It describes itself as a fintech and neobank business what aims to use software to help customers better manage their money and ‘live financially healthier’. It wants to become a fully autonomous, subscription based financial control centre operating as platform, without taking on the balance sheet risk of becoming a bank.
Why are Douugh shares in a trading halt?
The company announced that the trading halt is done pending an announcement relating to a proposed partnership agreement with a “leading full service payments” company and a capital rising.
No details yet on which business Douugh is partnering with, but we’ll probably find out next week.
Could a partnership help?
Partnerships can be a good way to unlock growth. For the shorter term Douugh just needs to capture market share because the banking sector is dominated by players like National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA).
There’s then another group of high-profile challengers like Suncorp Group Ltd (ASX: SUN), Macquarie Group Ltd (ASX: MQG), Bank of Queensland Limited (ASX: BOQ), Bendigo and Adelaide Bank Ltd (ASX: BEN) and ING.
Douugh also has neobank competition to deal with like 86,400, Up and Xinja.
Other tech shares have shown how partnerships can lead to strong growth. REA Group Limited (ASX: REA) and News Corp (ASX: NWS) have created a leading business. Ebay and PayPal were a great partnership. We’ll just have to see who Douugh have partnered with, it may not be a game changer.
Are Douugh shares a buy?
I can understand why some investors are attracted to Douugh shares, but it’s not the type of investment I normally go for. Pushpay Holdings Ltd (ASX: PPH) is one of the ASX growth shares that is high on my watchlist because of its international growth, rising profit margins and long term growth potential.
