Novatti Group (ASX:NOV) Announces $1 Million Strategic Investment from AWAG
Novatti Group Limited (ASX:NOV) has announced it has secured a strategic investment of $1 million from Australian Wealth Advisors Group Ltd (AWAG), marking a significant milestone in this investor update. This capital injection comes at a pivotal moment for the fintech company, following its achievement of positive operating cashflow of $0.2 million in Q1 FY26. The share placement, priced at 2.75 cents per share, represents a vote of confidence from AWAG’s subsidiary, Armytage Private. With an additional $500,000 potentially available through attached options by March 2026, this Novatti Group strategic investment funding positions the payments leader to accelerate its expansion.
The investment specifically targets growth acceleration within Novatti’s Acquiring business, aiming to replicate the EBITDA-positive performance already achieved in the company’s Issuing division. This targeted approach demonstrates disciplined capital allocation, focusing resources on proven business models that generate sustainable profitability.
Why Did AWAG Commit to This Strategic Investment in Novatti?
The decision by Australian Wealth Advisors Group to invest reflects several compelling factors that distinguish Novatti in the competitive fintech landscape. Armytage Private, established in Melbourne in 1995, operates Australian equity-focused investment funds with nearly three decades of selective investment experience, making their commitment particularly noteworthy.
Key Investment Drivers:
- Successful implementation of Novatti’s turnaround strategy
- Achievement of positive operating cashflow in Q1 FY26
- EBITDA-positive status in Issuing business (excluding corporate overheads)
- Proven pivot back to growth commenced in Q4 FY25
- Strategic assets and technology meeting AWAG’s strict investment criteria
Lee laFrate, Executive Chairman of AWAG, explained the rationale behind the investment: “AWAG invests in businesses that meet a strict criterion, including holding strategic assets or technology and providing a genuine growth opportunity. With this in mind, we have been tracking Novatti for some time. We have been impressed by the deep commitment to implementing their turnaround strategy and their successful pivot back to growth.”
The timing aligns with Novatti’s strongest quarterly performance in recent history, demonstrating operational improvements across multiple financial metrics. Furthermore, AWAG’s commitment extends beyond pure capital provision, offering Novatti access to deep expertise and ecosystem connections that could accelerate growth beyond the direct funding impact.
How Will the Strategic Investment Funding Accelerate Novatti’s Growth?
The $1 million in funding will be strategically allocated to accelerate growth within specific business segments and operational capabilities. This focused approach aims to replicate successful strategies already proven in the Issuing division. A core part of this strategy is the Novatti Group strategic investment funding, which enables targeted expansion into high-value market segments.
Funding Allocation Strategy:
- Increased marketing in targeted verticals – expanding reach in high-value market segments where Novatti’s solutions deliver maximum impact
- Bolstering acquiring sales capabilities – strengthening the sales infrastructure, team expansion, and capability building
- Product feature enhancements – improving competitive positioning through innovation and customer-requested functionality
Investment Structure Details:
| Component | Amount | Shares/Options | Price |
|---|---|---|---|
| Share Placement | $1,000,000 | 36,363,636 fully paid ordinary shares | 2.75 cents |
| Free-Attaching Options | Potential $500,000 | 18,181,818 options | 2.75 cents exercise price |
| Expiry Date | – | – | 31 March 2026 |
| Total Potential | $1,500,000 | 54,545,454 | Subject to option exercise |
The shares will be issued within seven days under Novatti’s existing ASX listing rule 7.1A placement capacity. Importantly, the placement price of 2.75 cents represents 80.2% of the 15-day volume-weighted average price (VWAP), exceeding the 75% threshold required by ASX listing rule 7.1A.3. This pricing structure demonstrates market-aligned valuation whilst providing AWAG with an attractive entry point.
Novatti CEO Mark Healy emphasised the strategic value beyond capital: “We are delighted to have AWAG join Novatti as a strategic investor. Their investment of $1m will not only support the implementation of Novatti’s pivot back to growth, it will also see Novatti benefit from leveraging their deep expertise and ecosystem connections.”
What Recent Milestones Validate This Strategic Investment Opportunity?
This strategic investment arrives on the back of impressive Q1 FY26 performance metrics that validate the company’s operational turnaround and growth trajectory. These achievements, detailed in a recent ASX announcement, demonstrate genuine progress towards sustainable profitability. The Novatti Group strategic investment funding is timed to build on this momentum.
Q1 FY26 Financial Highlights:
- Positive operating cashflow reached: $0.2 million – a critical milestone indicating the business generates sufficient cash from operations
- Positive EBITDA achieved: $0.1 million – demonstrating operational profitability before financing costs
- Available cash increased: $1 million rise to total $3.6 million – strengthening the balance sheet and financial flexibility
- Group margin improvement: 100% increase following revenue base reform – doubling profitability on each dollar of revenue
- AU/NZ payments margins: 50% and continuing long-term growth trend – industry-leading profitability in core markets
Achieving EBITDA-positive status in the Issuing business validates several critical aspects of Novatti’s business model, including operational efficiency, scalability potential, and the success of management’s turnaround strategy.
How Does Novatti’s Market Position Support Growth Objectives?
Novatti Group operates as a payments leader bridging traditional payments and regulated digital finance, serving a critical niche in the evolving financial services landscape. The capital injection from AWAG will enhance capabilities within this established market position, which spans nearly three decades of industry experience.
Strategic Business Advantages:
| Advantage | Impact on Growth |
|---|---|
| 30-Year Operating History | Established reputation and trust with enterprise clients |
| Comprehensive Solution Portfolio | Cross-selling opportunities across payment types |
| Dual Business Model | Issuing and Acquiring divisions provide revenue diversification |
| Strong Margin Profile | 50% margins in AU/NZ payments support profitable expansion |
| Regulated Environment Experience | Compliance capabilities create barriers to entry for competitors |
The company’s market position as a bridge between traditional payments and digital finance addresses a genuine market need. Furthermore, the 50% margins achieved in AU/NZ payments operations demonstrate pricing power and operational efficiency in core markets, providing financial capacity for investment and expansion.
What Role Will AWAG’s Ecosystem Play Beyond Capital Provision?
The strategic investment from AWAG provides more than financial resources; it opens access to the group’s extensive network, expertise, and ecosystem connections accumulated over nearly three decades of Australian equity investment experience. This strategic dimension potentially delivers value exceeding the direct capital contribution.
Ecosystem Benefits for Novatti:
- Investment expertise – AWAG’s experience evaluating and supporting growth companies provides strategic guidance
- Network connections – access to AWAG’s portfolio companies and business relationships may create partnership opportunities
- Market credibility – association with an established investment firm
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