Nerdwallet, Upstart Lead as FinTech IPO Index Rises 1%
The earnings cavalcade continues. For the FinTech IPO index, winners battled falling stocks to a draw.
The overall index rose 1.2% over the past five sessions. February looks to be a decent month, up about 6%, and year-to-date results are at a positive 26%.
Drilling down a bit, credit card revenue was up 52%, offsetting a decline in loan revenue, which was down 24%. The company said its average monthly active users were up 9% year over year to 20 million. The company guided for 30% growth in revenue in the current quarter, amid an area that expects continued contributions from credit cards, insurance and banking.
The upstart was up 14.5% in a week that saw the AI-powered lending platform report that top line growth in the fourth quarter was more than 250%. Supplemental and earnings filings from Upstart revealed that lending partners originated more than 154,400 loans totaling $1.5 billion across the company’s platform in the fourth quarter, down 62% from the same quarter a year earlier.
We detailed this spring coverage after earning which there is still pressure on the lending platforms, at least when measured in terms of lending – especially from institutional banks and banks. And Dave Girouard, CEO, said on the call that 2022 represented a “perfect storm for our business model. The withdrawal of federal stimulus disproportionately hurt our borrowers, like a simulated recession in which millions of mainstream Americans suddenly lost what had become their primary source of income.” And against that backdrop, he said, macro pressures are impacting lenders to the point where they “slow down or they pause.” But management also noted growing demand for small-dollar loans, which range from $200 to $2,500, and 12,000 of those loans originated in Q4.
Nubank is gaining ground in Brazil
Nu Holdings rose more than 10%. Nubank added 4.2 million customers in the fourth quarter ended December 31 to 74.6 million, up 38%. Deposits increased 55% to $15.8 billion. Monthly average revenue per active customer (ARPAC) increased to $8.2, up 37% year-over-year, according to company reports.
“Nu customers now make up 44% of the country’s adult population, up from 39% in the previous quarter,” the company said of Brazil. The company said in its release that core products, which include credit cards, bank accounts and personal loans, reached approximately 34 million, 53 million and 5 million active customers respectively.
Toast sang a little
Those gains were partially offset by the 12% loss for the week for Toast, whose shares plunged more than 22% on Thursday in the wake of earnings and an announcement that, as highlighted here, it has acquired digital drive-thru signage company Delphi Display Systems to boost its offerings for quick service restaurants (QSR).
“Drive through is a critical service model for QSRs that has become even more important over the past few years,” Toast CEO Chris Comparato said on the earnings call. The company said revenue rose 50% to $769 million. Gross payment volume increased 49% to $25.5 billion.
Looking ahead, Toast is focused on improving its ability to help restaurants with pricing channels by expanding its own capabilities in areas such as procurement.
Paymentus was up about 3%.
Citizens Bank has chosen Paymentus to offer payment services for its personal customers. The partnership will see Paymentus offer its Bill Center and Loan Payments tools to Citizens’ customers, the company said in an announcement provided to PYMNTS.
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