Platforms Rally to Push FinTech IPO Index 3% Higher

A 3% gain in the FinTech IPO Index this past week was led by the platforms. And in many cases, those firms have yet to report earnings — so, perhaps, let’s call this an anticipatory rally. Katapult, the lease-to-own platform, saw its shares leap 49.7% through the past five sessions. The company filed its 10-K with the Securities and Exchange Commission (SEC), and as a result has regained compliance with NASDAQ listing requirements. Beike Finance shares gained nearly 22%, followed by Huize at 21%, Marqeta said in an announcement that it expanded its U.S. partnership with Uber Eats into eight additional markets: Canada, Australia, Mexico, Brazil, Colombia, Peru, Chile and Costa Rica. Shares were 3.7% higher.

SoFi Loses Some Ground 

SoFi shares lost 8%. The company posted results this past week that more customers are using SoFi Money accounts for those direct deposits. CEO Anthony Noto observed on a conference call with analysts that total deposits were up 16% year over year during the first quarter to $21.6 billion. Against that backdrop, 90% of SoFi Money deposits (inclusive of checking, savings and cash management accounts) came from direct deposit members. Debit transaction volumes exceeded $1.9 billion in the quarter, up 20% from the fourth quarter of 2023 and 150% year over year. New product additions of 989,000 were up more than 38% year over year. Chief Financial Officer Chris Lapointe said on the call that annualized revenue per product of $59 was up 31% year over year. The company’s personal loan borrower’s weighted average income is $169,000 with a weighted average FICO score of 746. The annualized personal loan charge-off rate decreased to 3.45% from 4.02% in Q4, Lapointe said. Looking ahead, the company expects to see 15% to 17% adjusted net revenue growth for the current year. Remitly shares slipped 13.3%. In its most recent earnings report, the company said active customers increased to 6.2 million from 4.6 million, up 36%. Send volume increased to $11.5 billion, from $8.5 billion, up 34%. Revenue totaled $269.1 million, gaining 32%. The company said that more than 90% of customer transactions were disbursed in less than an hour. Upstart’s latest product announcement came as the firm debuted a tool to help lenders offer customized loan offers. The tool lets banks and credit unions identify when a customer is actively seeking a loan and make them an offer of credit, Upstart said in its product details. Features of the offering include instant identification of a lender’s customer and their tradeline status, allowing an immediate and automated response with a customized and branded offer of credit. It also lets lenders choose between Upstart’s artificial intelligence (AI)-enabled credit decisioning or the institution’s underwriting model. Upstart shares were 3% higher. NerdWallet shares were flat. The company’s first-quarter results indicated that credit card revenue of $50 million was down 19% year-over-year, primarily due to reduced marketing spending by financial services partners “amidst a combination of continued cautious underwriting and heightened balance sheet conservatism.” Loans revenue of $21.4 million was down 3% year-over-year, as mortgages declined in a higher interest rate environment. The company said that small-business products revenue of $30.4 million was up 21% year-over-year, tied to business credit cards and banking. The company’s 29 million average Monthly Unique Users were up 25% year-over-year. BILL.com shares gained 4.8%. An announcement this week said Airwallex and BILL partnered to help BILL customers make faster international payments. With this collaboration, BILL’s financial operations platform for small- to medium-sized businesses will add the local transfer capabilities of Airwallex’s global payments and financial platform, the companies said. This addition will enable BILL’s customers to benefit from faster payment speed and the option to deliver same-day or next-day payments in local currencies. Blend Labs announced a $150 million investment from Haveli Investments in the form of convertible preferred stock with a zero percent coupon. Blend will use approximately $145 million of the proceeds to repay all amounts payable under its existing credit agreement, and the remainder for general corporate purposes. Blend shares were 0.4% higher.