Novatti Group (ASX: NOV) Announces $1 Million Strategic Investment Funding for Growth
Novatti Group Limited (ASX: NOV) has confirmed a strategic investment funding agreement, securing $1 million to accelerate its growth plans following a successful operational turnaround. In this significant investor update, the Melbourne-based fintech company announced it has received the funding commitment from Australian Wealth Advisors Group Ltd (AWAG) and its subsidiary, Armytage Private.
This Novatti Group strategic investment follows the company’s recent achievement of positive operating cashflow and positive EBITDA in Q1 FY26. With a market capitalisation of approximately $18.2 million, Novatti has 567.6 million shares on issue and a cash position of $3.6 million as of 31 October 2025, positioning it for a new phase of expansion.
What Does This Strategic Investment Mean for Novatti’s Growth Plans?
The $1 million strategic investment will be facilitated through a share placement of 36.36 million shares at a price of 2.75 cents per share. This price represents 80.2% of the 15-day volume-weighted average price (VWAP). As part of the agreement detailed in the ASX announcement, AWAG will also be issued 18.18 million free-attaching options, which could provide an additional $500,000 in capital if exercised by 31st March 2026.
The shares are expected to be issued within seven days under Novatti’s existing ASX listing rule 7.1A placement capacity.
Key Investment Terms:
- Share placement: 36.36 million shares at 2.75 cents each
- Free-attaching options: 18.18 million options exercisable at 2.75 cents
- Total potential funding: $1.5 million if all options are exercised
- Issue timeline: Within 7 days of the announcement
- Option expiry: 31st March 2026
Mark Healy, Novatti’s CEO, commented: “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.”
How Will Novatti Utilise Strategic Investment Funding for Business Expansion?
The strategic investment funding is earmarked to drive Novatti’s return to growth, with a particular focus on its Acquiring business division. The company intends to apply successful strategies from its Issuing division, which has already reached EBITDA positivity before corporate overheads.
Funding Allocation Strategy:
| Growth Initiative | Purpose | Expected Impact |
|---|---|---|
| Targeted Vertical Marketing | Increased marketing spend in high-value sectors | Enhanced customer acquisition rates |
| Acquiring Sales Enhancement | Bolstering sales team capabilities and resources | Accelerated revenue growth trajectory |
| Product Feature Development | Technology improvements and competitive positioning | Strengthened market differentiation |
The company’s disciplined approach follows a comprehensive turnaround strategy implemented in FY25. Novatti’s improved financial health provides a stable platform to scale operations effectively.
Q1 FY26 Financial Highlights:
- Positive operating cashflow: $0.2 million
- Positive EBITDA: $0.1 million (excluding corporate overheads)
- Available cash increased: $1 million to $3.6 million total
- Group margin improvement: 100% increase after revenue base reform
- AU/NZ payments margins: Maintained at a strong 50%
Why Did AWAG Choose Novatti for Strategic Investment?
Australian Wealth Advisors Group Ltd and its subsidiary Armytage Private, established in 1995, bring 30 years of investment expertise to the partnership. Their decision to invest followed a thorough due diligence process, indicating strong confidence in Novatti’s strategic direction.
Lee laFrate, Executive Chairman of AWAG, stated: “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.”
AWAG’s Strategic Value Proposition:
- Deep market expertise in Australian equity markets
- Extensive ecosystem connections within financial services
- Proven track record of identifying growth opportunities
- Long-term partnership approach beyond capital provision
The option facility aligns AWAG’s interests with Novatti’s performance, as the exercise price encourages efforts to increase shareholder value before the March 2026 expiry.
What Are the Key Growth Opportunities for Novatti’s Business?
This capital injection enables Novatti to pursue growth opportunities in Australia’s digital payments market. The company provides a range of payment solutions for clients from fintechs to large corporates.
Core Business Segments:
- Issuing Division (Currently EBITDA Positive): This division has established revenue streams and demonstrates operational efficiency, serving as a model for other business units.
- Acquiring Business (Target for Growth Investment): This segment is the primary focus for the new funding and has significant potential for growth replication.
The company’s market position is strengthened by its long history, comprehensive solutions, and expertise in regulatory compliance for the digital finance sector.
How Does Share Placement Funding Benefit Novatti Shareholders?
The share placement funding structure provides Novatti with essential growth capital while aligning with the interests of existing shareholders. The issue price of 2.75 cents was determined according to ASX requirements to ensure fair value.
Shareholder Impact Analysis:
| Metric | Current Position | Post-Placement Impact |
|---|---|---|
| Available Cash | $3.6 million | Additional $1 million for growth capital |
| Growth Capability | Limited by cash constraints | A funded expansion strategy |
| Strategic Partnership | Independent operations | Access to AWAG’s expertise and connections |
| Future Funding | Potential future raises needed | Option facility provides an additional $500K |
The new shares will rank equally with existing fully paid ordinary shares. The placement will result in a dilution of approximately 6.4%, which is considered a reasonable trade-off for the injection of growth capital and the strategic partnership with an experienced investor like AWAG.
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