FinTech IPO Index Breaks Even Despite Volatile Trading Week

Economic data remained the key driving force behind stocks this past week, and the FinTech IPO Index was no exception. But despite volatile trading action throughout the group, the Index was flat, up a scant 0.06%.

As for the data, last week saw a slowing labor market, while jobless claims released on Thursday inched up just a bit. 

Robinhood was a standout in terms of performance through the week in the FinTech IPO Index, as its stock soared 10%.

August operating metrics showed that funded customers at the end of August were 24.3 million. Assets under custody at the end of August were $143.6 billion. Net deposits were $3.3 billion in August, translating to a 27% annualized growth rate relative to July assets under custody.

Over the last 12 months, net deposits were $37.5 billion, translating to an annual growth rate of 42% relative to August 2023 assets under custody.

Affirm shares rose 5.3%. As had been reported this past week, approved guests who book accommodations on Hotels.com can now pay over time by selecting Affirm at checkout.

These guests are shown the total cost of their purchase at checkout and will never pay more than they agree to upfront, the companies said. Expedia Group, the owner of Hotels.com, already offers Affirm’s buy now, pay later (BNPL) solution on two other platforms: Expedia and Vrbo.  Hotels.com joins 292,000 retail partners of Affirm offering this option, the companies said.

SoFi shares gathered 2.8%. The company’s Galileo business has introduced a pair of anti-fraud tools for banks, FinTechs and businesses. The new tools, announced earlier in the week, are designed to offer real-time fraud detection and risk management services amid a surge in digital transactions and evolving cyber threats.

Galileo Instant Verification Engine (GIVE) is designed to provide real-time verification of external bank accounts and ownership. Able to be used independently or as an integration with Galileo’s payment risk platform, GIVE lets businesses stop fraud by quickly verifying account existence, status, and ownership before transactions are processed.

Galileo has also introduced Transaction Risk GScore, a machine-learning-based offering that assesses the risk of card transactions in real time, adding “a layer of fraud signals” to the payment risk platform while letting customers “determine the risk appetite based on the multiple model responses.”

Lending practices at Brazil’s Nubank drew headlines and kept the stock roughly flat through the last five sessions, at a 1% gain.

As Bloomberg News reported Thursday, the lender — Latin America’s largest — is enjoying rapid growth, with around 60% of Brazilian adults using its app and its stock up 109% over the past year.

However, the report adds that a growing number of skeptics are puzzled by Nubank’s popularity and find its lending approach troubling.  The bank reported last month that non-performing loans of 90 days or more reached a record 7% during the second quarter, lowering provisions for bad debts to $760 million from $831 million three months earlier.

Reached for comment by PYMNTS, Nubank pushed back against aspects of the Bloomberg report, arguing that the news outlet references reports based on Brazilian Central Bank data using a different loss provision methodology than the one Nubank employs.

But not all platforms in the FinTech IPO Index finished in the black.  MoneyLion shares slipped 3.2%

The company said that it and Nova Credit have partnered to give credit issuers a more comprehensive view of consumers’ financial health and expand consumers’ access to credit.

With this collaboration, lenders using MoneyLion’s hosted decisioning engine can integrate Nova Credit’s cash flow underwriting data and analytics.  The joint efforts allow both expanded access to credit and enhanced risk management, per the release.

BILL shares sank 7.4%. The company named former Visa executive Mary Kay Bowman as its executive vice president and general manager of payments and financial services.

Bowman will oversee the financial operations platform’s payments and financial services business for small- to medium-sized businesses. Bowman was most recently head of global buyer, seller and platform product and solutions at Visa.

Huize shares lost 8.8%, and as noted here, the company last week said it completed its international arm Poni Insurtech’s acquisition of a 71.7% stake in Global Care Consulting Joint Stock Company, a Vietnam-based insurtech company specializing in digital transformation solutions for the insurance industry. The acquisition was completed through a combination of existing share purchases and subscription of new shares.

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