The rout tech stocks faced on Thursday captures all the pressures facing FinTech IPO names…and sums it up in a nutshell.
Economic data fueled fears of further rate hikes, with US GDP growing 3.2% year-over-year in the third quarter. This report beat estimates by 2.9%, and with inflation remaining at elevated levels, the promise of rate hikes by the Federal Reserve through 2023 seems assured.
The specter of continued rate hikes is fueling fears of headwinds for platforms and digital-only newcomers who promise to “remake” verticals such as real estate, lending and trading that are, well, rate sensitive.
One week left
For that, the FinTech IPO comes in the last week of the year down 3.7% over the past five sessions – and is more than 52% lower year-to-date. As for those rate-sensitive names? Trade finance firm Triterras fell 28% during the week, and residential real estate-focused Opendoor followed closely behind with a 26% loss. Upstart fell 16% over the same period as the model of creating personal loans and selling them to investors may face headwinds as these investors demand a higher yield in a higher rate environment .
OppFi lost 7.7% in a week in which the consumer finance-focused FinTech closed a $150 million credit facility with a Castlelake subsidiary as a lender, according to reports from the society. The company said the facility will allow OppFi to fund receivables growth.
Nuvei slipped around 8%. As reported in this space late last week, Canada-based Nuvei and Holland Casino have extended their partnership to enable instant payouts for Dutch players. Payments are enabled by integrating SEPA instant credit transfer into its cashier, and funds can be instantly accessed from user accounts.
Futu lost just under 7%, after offering a dual listing on the Hong Kong Stock Exchange of its class A shares.
And in a sign of what could happen to FinTechs — in an exit strategy that could become a consideration for embattled FinTech names — EQT Private Equity’s acquisition of Billtrust has been completed. The privatization transaction means the B2B cash ordering software provider has gone out of business. The all-cash transaction values Billtrust’s equity at around $1.7 billion and comes a year after the company went public and began trading on the Nasdaq.
Losses from the names above have overwhelmed the few laggards who managed to make gains over the past five trading days.
Katapult rose 1%, The company, which focuses on omnichannel retail, said in a statement that it has partnered with iBUYPOWER, which makes high-performance custom gaming PCs on flexible payment options. .
The most notable gainer was dLocal, which jumped 14%. The company responded this week to allegations made in a report by short seller Muddy Waters Capital last month and also said it had implemented a stock buyback program of up to $100 million in shares of the society.
“We maintain separate bank accounts for traders’ money and our own money. We did not use merchant money to provide loans to our senior executives or to pay dividends to our shareholders,” the company said. dLocal also said it has been consistent and transparent about how it calculates and reports its total payout volume and cohort comparisons.
How consumers pay online with stored credentials
Convenience drives some consumers to store their payment credentials with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 US consumers to analyze the consumer dilemma and reveal how merchants can overcome holdouts.
