Affirm, Upstart Helps FinTech IPO Index

Not bad.

Relatively speaking, that is.

In a week in which sentiment in the stock market has been buoyed by retailers (Target, Lowe’s, et al) and in which we saw mid-single-digit percentage declines in broad indices, the FinTech IPO group held up fairly good.

In fact, using Wednesday as a key point of comparison, the average name in our pantheon of more than three dozen members was down “only” about 1.6%.

While we wouldn’t go so far as to say that there has been a rotation toward recently-listed tech companies as bastions of security, in at least some cases over the past week these names have risen by double-digit percentage points, with some stratospheric. featured

still down for the year

And yet, despite an 18% increase for the IPO group, we are down 40% YTD. That gives us pause to wonder how long a rally might last, especially if it is a relief rally.

As for those tailwinds: Upstart is up about 72% through the end of last week. Affirm won 67%.

For Affirm’s performance, there’s no real mystery here: recent earnings have shown that buy now, pay later (BNPL) and other loan products have still been in demand. As noted in this space, Affirm’s core metrics, CFO Michael Linford noted the exponential increase in merchants added over the past year, rising to 207,000 from just 12,000 in 2021. At the same time, Linford said customers assets more than doubled. to $12.7 million, while gross merchandise value (GMV) advanced 73% to $3.9 billion.

Also Read: Affirm Surprises Market With Merchant And Customer Growth, Shopify Extended Deal

Upstart’s rally may in fact be a relief bounce, given that the name roughly halved right after the gains. Results and comments were less optimistic on the state of credit and some macro comments from management. With a nod to lending activity, Upstart CEO Dave Girourd said “a lot of people who would have been approved are no longer approved.”

The total volume of loans in the last quarter was 465,537; at the end of the fourth quarter it was 495,205. Supplementary materials released by the company alongside earnings show loan conversion rates were 21.4%, down from 24.4% at the end of last year.

And of course, not all of the news in the past week has been about earnings.

For example, Billtrust announced last week that PepsiCo has implemented its automated credit application solution to support the distribution of a new Mountain Dew-branded alcoholic beverage. Those joint efforts will support the addition of new distribution partners.

And separately, Nuvei Corp. said it has partnered with Hard Rock Digital to provide payment services for its Hard Rock Sportsbook mobile app. Mechanically, players in Arizona, Virginia and future states adopting the Hard Rock Sportsbook platform will be able to instantly fund their gaming wallets from their bank accounts.

For the FinTech IPO, last week could have been called the pause that is updated. For a moment, perhaps a brief moment, the group managed to outshine their larger reference points.

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DATA OF NEW PAYMENTS: THE TRUTH ABOUT BNPL AND STORE CARDS – APRIL 2022

About: Shoppers who have store cards use them for 87% of all eligible purchases, but this doesn’t mean retailers should initiate buy now, pay later (BNPL) from checkout. The Truth About BNPL And Store Cards, a collaboration of PYMNTS and PayPal, surveys 2,161 consumers to find out why providing both BNPL and store cards is key to helping merchants maximize conversion.

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