FinTech IPOs face long weekend with 3.5% loss

For the FinTech IPO index, it feels like the long weekend can’t come soon enough.

The decline continues, although earnings are largely in the rearview mirror, although headlines in recent trading sessions have been sporadic. Overall, the index was down 3.5%, and the decline so far this year now tops 40%. There were several double-digit percentage gains — and several double-digit declines, too.

Figure, FinTech IPO index

Futu Holdings Limited led the gainers, rising more than 20% in the past week. The company reported what it called “stable growth” in the most recent period ending June 30.

The company said in the quarter it recorded $222.6 million in revenue. Futu said in its announcement that at the end of the quarter, the total number of users of moomoo and its sister brand Futubull increased by 20.0% year-on-year to 18.6 million. The total number of registered customers increased by 30.5% year-on-year to more than three million. And by the second quarter, according to the announcement, total client assets were $55.3 billion, up 12.3% year over year.

Hippo Insurance lost 6% on the day yesterday, but still managed to post a 9.7% gain over the past five sessions, following news that the company has laid off 70 employees, or about 10% of its staff, to help “drive efficiency.” Ran Harpaz is also leaving the role of chief operating officer and chief technology officer in November, the company said.

Enfusion was up about 7% on the week, as SeekingAlpha reported that the company has received acquisition interest from private equity firms.

Blend gained 5.3%, after announcing late in the month that it had launched Instant Home Equity, billed as an automated end-to-end digital home equity product for lenders. The company said in its release that the digital solution integrates income and identity verification, title, adjudication, property valuation and notarization to achieve unprecedented time and cost savings

Collaboration and some stock photos

Billtrust said last week that it had partnered with Johnstone Supply, a cooperative wholesale distributor in the HVACR industry. The partnership, according to the release, will help Johnstone’s 90+ individual business owners take control of the order-to-cash process. Shares in Billtrust fell 22% during the week.

Remitly lost 14.3%, continuing its decline through the end of the month. The company said in August that it has signed a definitive agreement to acquire Rewire, an Israel-based financial services platform for migrant workers, for $80 million in cash and stock.

As for the continued fortunes of the FinTech IPO group itself, we noted here that at least some avenues for “exit strategies” may be rapidly closing. It includes mergers and acquisitions.

As reported earlier this month, it has become tougher for potential suitors in any industry to raise the capital necessary to fund any deal in the first place. Expected deals totaling more than $150 billion have either been postponed or canceled as funding becomes tight. To date, the more than 40 names in the index show an average loss of 46% since the companies’ initial public offerings (IPOs).

The average market capitalization of the FinTech IPO member is around $3 billion, indicating that the financial “hurdle” to buy one of these companies is not insignificant, even with the recent downturn. And since stock prices continue to be volatile, as we wrote yesterday, it must be noted that using stocks as currency is becoming less attractive (and less feasible) to get deals done.

Also read: M&A Exits Dim for FinTechs as IPOs Fall 38%

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