Velocity offers frequent flyer points for IPO investments
Velocity customers could earn thousands of frequent flyer points by investing in IPOs following a new partnership between Virgin Australia and fintech start-up OnMarket Bookbuilds.
More than 6 million Velocity members will be eligible to earn one point for every $4 spent on investing in IPOs as part of the invest-and-fly initiative.
The new partnership has the potential to be more fruitful for members than traditional supermarket alliances, says iFLYflat founder and CEO Steve Hui.
"This is a way for Velocity customers to earn serious points if they are interested in investing in an IPO," Hui told Money.
Hui says that the average grocery shop nets customers a tiny amount of points yet still drives a lot of consumer behaviour.
"With this one, you earn one point for every $4. People are likely to spend at least $5000 on an IPO so they would earn at least 1250 points," he says.
In its first year, the OnMarket app and portal has given the Australian public access to 34 IPOs and placements, says chief executive Ben Bucknell.
"That's approximately one in three of all IPOs in Australia in the corresponding period," he says.
Hui says the partnership is another attempt by a major airline to diversify its income stream, with the Velocity program generating $328 million in revenue for Virgin in the year to June.
But despite increasing opportunities for members to accrue points, using them is another matter. "With all these new ideas about earning points, there doesn't seem to be any move to help people use them," says Hui.