FinTech IPO Index Surges 6%, as SoFi and NerdWallet Post Quarterly Results

Earnings season is in full swing, and has given several names in the FinTech IPO Index a boost.

Through the past five days, the index surged 6%.

NerdWallet shares soared 67%.  The company said last week that revenues of $153 million were up 7% year over year (YoY). Monthly unique users were up 22% to 24 million. Credit card-related revenues were down 6%, per company materials, as “headwinds continued during the quarter, especially in areas such as balance transfer products with long introductory zero-interest periods, as a result of conservatism from banks with deploying capital,” according to an investment letter.

The company also debuted  NerdUp, a secured credit card that is designed to help consumers build and improve their credit responsibly.

NerdUp, which is offered in partnership with Bond, provides several features that aim to remove barriers for consumers who want to build credit, according to the company release. The secured credit card is free, requires no hard credit check, has no annual or monthly fees, and has a minimum deposit that is lower than the industry standard — $100 compared to the standard of $200 to $300. NerdUp also offers a 0% interest rate as users pay off their balance each month, per the release.

SoFi shares gained 7.7%.

In our own reporting on the company’s latest quarterly results, we noted that new membership momentum carried over into the most recent quarter as this metric gained 47% YoY to 717,000.

Galileo account growth was up 10% to 137 million. Student loan originations were up 101% to $919.3 million.

CEO Anthony Noto said during a conference call with analysts that “student loans, as expected, saw some increasing demand ahead of the resumption of student loan payments.”

The pace was SoFi’s highest quarter of originations since the first quarter of 2022, he said.

At the end of the third quarter, he said, more than 65% of overall loans were funded by deposits, and $2.9 billion of new deposits in the quarter helped fund the $5.2 billion of total originations.

Noto stated on the call that there was also “strong growth” in SoFi Money products, up 53% YoY to 3.1 million accounts. The median FICO score of members was 743 for the firm’s direct deposit portfolio — and more than 50% of newly funded SoFi Money accounts are setting up direct deposit by day 30.

Affirm Jumps on Amazon Business BNPL Pact

Affirm shares were up 20.8% through the past week. As reported here, Amazon Business is offering buy now, pay later (BNPL) services in collaboration with Affirm. Amazon Business started rolling out Affirm on Thursday (Nov. 2) to eligible sole proprietor businesses. It will be available at checkout to all eligible Amazon Business sole proprietor customers by Black Friday, per an announcement Thursday.

Open Lending shares were up 1%.

The company said this week that it released the addition of “new alternative data attributes” for auto loan applicants to more accurately inform the risk score generated by its Lenders Protection solution. That data, the company said, ties into expanded criteria from TransUnion and LexisNexis, and per the company’s announcement, enables Lenders Protection to analyze more robust car buyer data for loan decisioning.

“These enhancements help financial institutions provide more competitive pricing to a larger borrower pool, increase loan volume, minimize risk and grow return on assets with the true capability that comes from extensive data fueling cutting-edge AI,” Open Lending said.

Hippo Holdings Cuts Staff

Hippo Holdings said in a filing with the Securities and Exchange Commission that “to further drive efficiency and increase focus on the strategic priorities” it had laid off about 120 employees, or 20% of the company’s staff. The company expects to incur charges of between $2.2 million to $2.7 million for severance, benefits and related costs as a result.

Hippo shares gained 9.4%.

Separately, and as reported here, Toast debuted a mobile app that lets restaurateurs manage their eateries on the go. Toast Now is part of a larger product rollout that brings upgrades to its point-of-sale (POS) system. Beta testing showed users logging into the app around three times more often than the average users of the Toast web portal, Toast noted this week. The app offers real-time updates with live sales and labor reporting, as well as a “Manager Log,” which lets owners, operators and managers communicate without having to be at the restaurant.

Meanwhile, Toast has updated its POS tool to include features like Advanced Table Management. Toast shares gained 3.5%.

Nuvei said in a release that it has been selected by KoreConX, a infrastructure technology platform that enables individuals to invest in private companies with regulated intermediaries, as its primary payments partner.

The joint efforts mean that private businesses based in the U.S. that are connected to the KoreConX infrastructure platform can accept SEC-compliant investments via card payments and account-to-account transactions. Nuvei’s stock notched a 7.8% rally through the five sessions that ended Thursday.