Yes, it was bad.
Amid a Thursday rout that saw the Nasdaq slide by 5%, our FinTech IPO Index, not surprisingly, was also swept up in the downdraft. The average name among the more than 40 tracked was down 6% in the session.
Not a single name ended the day in positive territory — and the dip on Thursday was enough to send the group down 1.9% for the past five days, which, when you think about it, was better than the 3% lost by the Nasdaq in the same period.
The Read Across
The rampant selling on Thursday, where marquee platform names like Etsy were down 16% and Wayfair plummeted 26%, shows that investors are, by and large, terrified of slowing growth. The great digital shift — and the tailwinds of eCommerce, in particular — are showing signs of deterioration and even evaporation.
That’s the fear, anyway. As noted in a separate piece published here, there are quite a few reasons to believe that consumers’ pullback on spending does not translate into a wholesale shift away from the connected economy’s evolution.
See also: Platform Stocks’ Rout Misjudges Realities of the Great Digital Shift
Source: PYMNTS
And as for the FinTech-specific names, leading right into the terrible, no good trading day, we were having what might be termed a “relief rally” from what had seen a relentless downturn over the past few months.
Underpinning the gains, albeit temporary, is a series of new product and service initiatives that spotlight the digital pivot and advance technologies tied to the disruption promised by FinTechs. And in at least some cases — looking beyond Thursday — these announcements were enough to keep things buoyant.
Evidence supporting that claim can be found in Upstart, whose shares rocketed up by 14% through the past week following news that the lending platform will debut Upstart AI Lending for Salesforce.
This service, available on the enterprise cloud marketplace Salesforce AppExchange, will let bank and credit union staff offer artificial intelligence (AI)-enabled digital lending for customers, either in-person, at a local branch, over the phone or by using a QR code from Salesforce’s Financial Services Cloud.
Read more: Upstart Debuts AI Lending Platform on Salesforce AppExchange
However, we’d be hard-pressed to find any other names that managed to crest to positive returns, no matter what the news might have been.
Separately, Affirm was down 14% through the past five sessions. Affirm, a buy now, pay later (BNPL) network, and payment provider Fiserv are partnering to make Affirm available to Fiserv’s enterprise merchant clients.
The partnership, set to go into effect later this year, makes Affirm the first BNPL provider fully integrated into Fiserv’s Carat operating system. The integration will let Fiserv’s merchant clients add Affirm’s Adaptive Checkout function, which offers biweekly and monthly payment options to allow customers to choose how they want to split costs.
Related: Fiserv to Offer Merchant Clients Affirm’s BNPL Service
Billtrust’s 5.7% loss through the same time frame came as the firm said this past week that it is working with American Express to enable suppliers to accept payments made through American Express virtual cards.
See also: American Express, Billtrust Partner on Virtual Card Payments
Additionally, Robinhood said that it launched a stock lending feature that lets its users lend out their fully-paid stocks to borrowers recruited by the company (and shares sank 11.6% through the past week).
Read more: Robinhood to Let Users Lend Against Stock
Earnings Continue to Trickle In
Earnings season continues to drive some names. For instance, XP, a Brazil-based FinTech focused on low fee financial products and services, said this past week that its first quarter active client base grew by 3% quarter over quarter and 17% year over year to 3.5 million.
Assets under custody grew 22%, but net inflows were down 5% sequentially, partly due to macro concerns. The stock was down about 14% on the week in the wake of the announcement.
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