Lending platforms plunge Sender FinTech IPO down

It wasn’t just crypto that had investors running for the exits.

And it wasn’t just more interest rate hikes from the Fed that made investors hit the sell button.

This week’s downdraft for the FinTech IPO Index was a confluence of overs, yes, but the general malaise hitting the markets left no name unscathed over a five-day losing streak that sent the FinTech IPO Index down 4.9%.

And this time it was the platforms that led the plunge, even though the plunge was widespread.

Earnings in focus

Doma Holdings was down 22% for the week, after reporting earnings that showed total revenue of $96 million in the fourth quarter was down 11% compared to Q3 2022. Retained premiums and fees of $35 million fell 17% compared to 3rd quarter 2022 in a difficult period. The property market. Procurement closed orders down 26% compared to Q3 2022.

Max Simkoff, CEO, said on the conference call with analysts: “As we look ahead to the first half of 2023, while many in our industry have begun to point to potential signs of recovery, we remain cautious and expect a tepid housing market to continue putting pressure on our ability to generate retained premiums and fees.”

Katapult lost just under 20% over the same time frame, reporting in its own results that in the December quarter gross originations of $59.8 million increased by $0.9 million, or 1.5% year-over-year, the first positive the bend since the third quarter of 2021. Gross originations in December 2022 increased by the middle of ten percentage points year-over-year. Total revenue of $48.8 million was down $24.5 million, or 33.4% compared to the prior year period

Oportun said this week it has unveiled a “new brand identity” that merges Oportun and Digit into a single brand and app. The announcement comes ahead of the company’s earnings call, which is scheduled for early next week. The stock gave up a little more than 16%.

Open Lending lost 1.9%. The company has announced a partnership with Crescent Bank, which offers auto loans to consumers in 32 US states.

Slightly positive performance

However, there were a few outliers. The Nuvei share rose 21% over the last five sessions.

The company said that during the fourth quarter of 2022, total volume increased 28% to $40.3 billion from $31.5 billion; and e-commerce represented 91% of the total volume. And with that tailwind in place, the company reported that revenue rose 4% to $220.3 million in the most recent period. At least there was some headwind in the mix, as Nuvei noted in its filing that revenue from digital assets and cryptocurrencies fell 58% year over year to $19 million.

Elsewhere, and in the same week as the earnings were reported, Nuvei said businesses operating in Australia can now access the full suite of payment solutions, including procurement, processing, alternative payment methods and risk management.

Paysafe rose nearly 9%, reporting earnings this week. Total payment volume was $33.1 billion, up 5%. Revenue of $383.6 million was up 8% on a constant currency basis. Digital wallet revenue rose 7% in constant currency, and average transactions per active user, the company said, were 25.9, up 34% year-on-year.

The deepening gloom has sent our index lower for the week, although overall performance is still up 12% for the year. But as mentioned here, the average name is trading at about half of the original offer price.