Affirm, NuBank, Upstart Lead FinTech IPO Surge
The FinTech IPO index has seen an upswing so far, despite the usual volatility.
Year to date, the group is up 22%, boosted by last week’s rally which saw the index rise 6.4%.
Earnings season has shown that – as evidenced by the banks and payment networks such as Mastercard and Visa – although a recession may be underway this year, consumer spending was up in the fourth quarter and strength remains. Thursday (January 26) provided a notable boost to the market overall as broader markets rallied on positive GDP data.
For FinTechs, it was a show dominated by the platforms. A number of new product announcements and partnerships have caught on from the aforementioned spending and a shift to digital payments and installment loans.
Installment payments are making inroads into travel
Confirmed shares rose in a week heralding the announcement that it is partnering with Kayak to offer travelers payment flexibility amid a 40% year-over-year increase in the price of airline tickets. Travel demand remains high, and the joint effort will allow travelers to share costs over $150 in monthly payments.
In separate data points highlighting the marked rebound in travel-related spending as economies reopen, PYMNTS reported Thursday that Mastercard’s cross-border payment volume was up 31% on a local currency basis. Affirm’s shares rose more than 17.2% over the past five sessions.
Nubank followed suit, announcing this week that it has received a loan of up to $150 million from the International Finance Corporation. IFC is the World Bank’s private lending arm. The loan has a term of three years and will help the company expand its financial inclusion efforts in Colombia, according to the announcement. The Nubank share recorded an increase of 17.1%.
The upstart gained 12% and said it has introduced new features to its auto store platform in an effort to simplify the vehicle-buying experience, as noted by PYMNTS. As part of the initiative, the company will introduce a digital finance tool during the second quarter of this year, which enables “frictionless signing and contracting”, without requiring a new sales process for dealers. The company will also launch an online sales tool that will allow consumers to complete their car purchases entirely online. Upstart says both tools can be customized to fit with retailers’ workflows and software, according to the announcement.
Separately, Marqeta said it has launched a new web push provisioning product. The shares were 11% higher. The Marqeta announcement said push provisioning reduces friction at the point of sale and allows the firm’s corporate customers to provide end users with the ability to pay directly from their mobile wallet without having to download a mobile application. Meanwhile, the company said, conversion rates are improving.
Paymentus also made headlines, with its stock jumping nearly 5% higher as the online bill payment company expanded cash payment capabilities on its instant payments network.
In terms of mechanics, the expansion is powered by the Green Dot Network. Billers connected to the Paymentus network can accept cash payments from customers at more than 90,000 locations. The announcement comes as the Federal Reserve has reported that cash payments make up a fifth of all transactions, while “cash stuffing” has become a popular budgeting trend for Gen Z consumers.
Real estate services platform Doma Holdings saw its stock rise 6.5% over the past five sessions. The company said it had added digital payment solutions provider paymints.io to its AgentMarketplace vendor partnership program. The addition, according to the announcement, reduces the risk of wire fraud and allows home buyers to digitally deposit earnest money.
PYMNTS data: Why consumers are trying digital wallets
A PYMNTS study, “New Payments Options: Why Consumers Are Trying Digital Wallets” finds that 52% of US consumers tried a new payment method in 2022, with many choosing to try digital wallets for the first time.
