FinTech IPO Index Adds 0.5% as SoFi Weighs In With Earnings

Headed into the end of January, and with earnings season in full swing, the FinTech IPO Index was up a slight 0.5%.

Earnings Capture Headlines

SoFi’s stock was up 1%, leading the headlines tied to the quarterly results that come in a torrent every three months. SoFi Technologies latest earnings report saw net new member adds of nearly 585,000 represented 44% growth for a total of over 7.5 million members at the close of the fourth quarter.

More than half of newly funded SoFi Money accounts are setting up direct deposit by day 30, CEO Anthony Noto said, “which has had a significant impact on debit spending.” Debit spending was more than $1.5 billion on a quarterly run rate and is three times higher than it was last year.

Noto said on the conference call with analysts, “We continue to diversify our revenue with financial services and the tech platform contributing 40% of fourth quarter adjusted net revenue up from 34% in the year ago quarter.” He noted that student loan originations grew 95% year over year (YoY) to $790 million.

“We see ample opportunity for cross buy in terms of engagement,” Noto said on the call.

XP shares lost 0.6%. The company said this week that client assets totaled 1.1 trillion reals ($223.7 million) as of Dec. 31, up 19% YoY. Growth was driven by 105 billion reals in net inflows. Active clients grew 17% YoY, totaling 4.5 million in the most recent quarter.

In the quarter, card related processed volume was 11.8 billion reals, representing 44% growth YoY. Total active cards were 1.2 million, surging 68% from last year. Insurance active policies, that include whole and term life insurance products distributed across the platform, totaled 54,000, an increase of 36% YoY.

Partnerships, Too

Open Lending announced that it launched a partner integration with Automatic, a platform that connects automotive lenders with independent, used vehicle dealerships. The partnership, the companies said, will help Lenders Protection users to grow their indirect lending relationships by delivering instant, accurate decisions to dealers within a single platform, per the release. Lenders can integrate with Automatic in two ways: by leveraging Automatic’s loan origination system (LOS) capabilities or opting to “bring their own” LOS.

Open Lending shares lost 5%,

Upstart lost 2.8%. As reported here, Upstart plans to expand its auto retail financing capability to another 13 states during the first quarter. The lending marketplace aims to reach 90% of U.S. consumers by the end of the quarter, up from the 70% coverage achieved in the third quarter of 2023, as described in the company’s latest announcement.

The company’s vehicle financing will be extended to Alabama, Arizona, Colorado, Connecticut, Maine, Minnesota, Mississippi, Montana, Oklahoma, Rhode Island, Utah, Washington and Wyoming, per the release. Upstart said that dealers can expect a back-end gross that is as much as 50% higher than the industry average. Upstart has also expanded its integrations with leading dealer management system (DMS) solutions, such as Tekion, CDK and Dealertrack.

Nuvei, as detailed this week, launched its first integration into Microsoft Dynamics 365 Business Central.

The integration will enable small to medium-sized businesses to incorporate various payment methods into their existing enterprise resource planning (ERP) modules, the companies said.

It is also expected to streamline accounting workflows and back-office reconciliation processes for businesses in sectors such as manufacturing, distribution, wholesale and construction. As reported, the integration offers features such as invoice matching and proprietary cash acceleration tools, allowing businesses to shorten their cash conversion cycles.

Nuvei shares added 0.8%.