FinTech IPO Index Down 5.5% as 3Q Earnings Roll Out

Even some double-digit surges in some of our beaten-down companies weren’t enough to keep the overall FinTech IPO index in positive territory this week.

The overall index slipped by 5.5% through the past five sessions and now stands 46.6% lower for the year.

Granted, there was a dearth in company-specific news this week. But earnings season is getting into full swing, and it should offer clues about consumer spending — and continued demand, if any, for buy now, pay later (BNPL) lending to embedded payments to digital banking integration and all points between.

Notable Gainers

9F Group was up 56.3%. It has become routine to see this name swing wildly, and there remains the continued navigation of the 180-day period to get back in compliance with Nasdaq listing rules.

The personal loan and auto refinance company Payoneer gathered 7.5%, continuing to make strides on the news that the company’s shares, beginning this week, were to be listed among firms trading in the S&P SmallCap 600.

These gains were more than offset by slippages seen with names including KE Holdings, which plummeted 21.4%. Concerns over housing transactions (and the services that would accompany those transactions) in general and China’s economy, in particular, may have done much to turn investor sentiment negative this week.

Notable Losers

Bill.com fell 18%.  the company has changed its name to BILL and is in the midst of a rebranding.

Brazilian FinTech Nubank was down more than 17% across the last few days.  The Central Bank of Brazil (BCB) is set to cap interchange fees for prepaid cards starting in April 2023, and it will also standardize the settlement term for debit and prepaid card transactions. The limit will be 0.7% for interchange fees for prepaid cards.

The BCB said the changes are expected to “increase the efficiency of the payments ecosystem, encourage the use of cheaper payment instruments, enabling the reduction of costs for stores to accept these cards.” Nubank revenue contribution from interchange was 7% of consolidated top line.

OneConnect Financial Technology slipped 14%. This past week the company unveiled OneConnect Smart Technology in the United Arab Emirates (UAE) at the Abu Dhabi Global Market.

Nuvei gave up 11%. Italian iGaming operator Lottomatica is re-platforming its digital services and partnering with payments technology firm Nuvei to deliver faster payouts to users. The new offerings let Lottomatica offer expanded payment and withdrawal options.  Per the joint announcement between the companies Nuvei uses smart transaction routing to help lower costs and increase card acceptance rates.