FinTech IPO Index Slides Despite Futu’s 20% Surge

For the FinTech IPO Index, it feels like the long weekend cannot come fast enough.

The downturn continues, even as earnings are largely in the rearview mirror, even though headlines in the past several trading sessions have been sporadic. Overall, the index was down 3.5%, and the year-to-date decline now tops 40%. There were several double-digit percentage gainers — and several double-digit decliners too.

Chart, FinTech IPO Index

Futu Holdings Limited led gainers, soaring more than 20% in the past week. The company  reported what it termed “stable growth” in the most recent period that ended June 30.

The company said that in the quarter it logged $222.6 million in revenues. Futu said in its announcement that as of quarter end, the total number of users of moomoo and its sister brand Futubull increased 20.0% year-over-year to 18.6 million. The total number of registered clients increased 30.5% year-over-year to more than three million.  And at the of the second quarter, according to the announcement, the total client assets stood at $55.3 billion, up 12.3% year on year.

Hippo Insurance lost 6% on the day yesterday, but still managed to show a 9.7% gain through the past five sessions, in the wake of news that the company has laid off 70 employees, or about 10% of the staff in order to help “drive efficiency.” Ran Harpaz is also leaving his role as chief operating officer and chief technology officer in November, the company said.

Enfusion was up roughly 7% on the week, as SeekingAlpha reported that the company has received buyout interest from private equity firms.

Blend gained 5.3%, having announced late in the month that it had launched Instant Home Equity, billed as an automated end-to-end digital home equity product for lenders. The company said in its release that the digital solution integrates income and identity verification, title, decisioning, property appraisal, and notarization to achieve unprecedented time and cost savings

Collaborations and Some Stock Slides

Billtrust said this past week that it had entered a collaboration with Johnstone Supply, a cooperative wholesale distributor in the HVACR industry. The collaboration, according to the release, will help Johnstone’s 90+ individual business owners take control of the order-to-cash process. Shares of Billtrust sank 22% through the week.

Remitly lost 14.3%, continuing its slide through the end of the month. The company had said in August that it that it has signed a definitive agreement to acquire Rewire, an Israeli-based financial services platform for migrant workers, for $80 million in cash and stock.

As to the continued fortunes of the FinTech IPO group itself, we noted in this space that at least some avenues of “exit strategies” may rapidly be closing off. That includes mergers and acquisitions.

As reported earlier this month, it’s gotten tougher for would-be suitors in any industry to obtain the capital that’s necessary to finance any deal-making in the first place. Would-be deals totaling more than $150 billion have either been postponed or canceled as financing becomes scarce. To date, the more than 40 names in the Index shows an average loss of 46% since the companies’ initial public offerings (IPOs).

The average market cap of the FinTech IPO member is about $3 billion, which indicates that the financial “hurdle” of acquiring one of these companies is not insignificant, even with the recent downturn. And as share prices continue to be volatile, as we wrote yesterday, it must be noted that using stock as currency becomes less attractive (and less feasible) to get deals done.

Read also: M&A Exits Dim for FinTechs as IPOs Drop 38%