The RAIZ Invest Ltd (ASX: RZI) share price is edging lower on Tuesday.
At the time of writing, the mobile-first financial services platform provider's shares are down 1% to $1.31.
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Why is the Raiz share price edging lower?
The Raiz share price is on the move today after the company announced the completion of its share purchase plan (SPP).
This SPP was part of a wider capital raising announced in April that was aiming to raise a total of $13.2 million from investors. This comprised $10.2 million via an institutional placement and $3 million from the SPP.
While the company successfully raised the $10.2 million at $1.50 per share last month, things weren't quite as positive for the SPP.
According to today's release, just 37 retail shareholders took part in the SPP. This led to the company raising just $218,700, bringing its total to just over $10.4 million, which was well short of target.
However, this wasn't overly surprising given the company's decision to undertake the SPP at the same price as the institutional placement.
Since announcing the capital raising on 28 April, the Raiz share price has lost approximately 20% of its value. This left the Raiz share price trading 11% lower than the offer price at $1.33 at the close of play on Monday. This means it would have been cheaper to buy shares on-market than take part in the SPP.
Why is the company raising funds?
The company intends to use the proceeds to accelerate customer growth, develop new products and services, and expand into new geographies.
Some of the funds are likely to be used to support the growth plans of the recently acquired Superestate business. Superestate is a niche integrated superannuation and Australian residential property investment platform.
Commenting on the acquisition, CEO George Lucas said: "This acquisition, the first in our five-year history, marks an important milestone for the group by demonstrating organic growth is not our only option to increase funds under management (FUM) and Active Customers. Other acquisitions are on our radar as we actively look for opportunities in the Asia Pacific region."
"The acquisition provides tangible benefits to the customers of both financial services groups. Raiz secures the capability to offer residential property as an asset class in and outside superannuation in much the same way that we successfully introduced Bitcoin to our customers, giving them a means of investing in cryptocurrency."
Despite this recent weakness, the Raiz share price is still up over 30% year to date.
