FinTech IPOs notch 4% gain as software firms surge

Of course, earnings season will determine how long the FinTech IPO rally lasts.

But even with the volatility of day-to-day trading toward the end of the week, even with a bumpy Thursday, software-as-a-service is attracting renewed investor attention, and indeed enthusiasm.

In the five days leading up to Thursday’s trading, several SaaS names posted double-digit gains. The group’s rally has helped push the index 4.2% higher for the week, and with the exception of a scary Halloween performance, October has also been positive, up 2.7%.

Perhaps the software names, beaten down as they have become, are in the midst of a relief rally. But then again, the product announcements and partnerships that have characterized the group in recent days also speak to the fact that platform firms are still—earnings volatility aside—transforming and simplifying financial services.

OneConnect, having risen 23.8%, has been a standout.

The company said last week that it has launched OneCosmo, billed as a one-stop omni-platform for all-in-one digital banking solutions, in the United Arab Emirates (UAE). According to the announcement, the solution was jointly developed with Brazil-based technology company Pismo, and OneCosmo allows customers to launch financial products, underpinned by real-time data, within weeks due to pre-integrated and pre-configured features.

Crypto is making progress

Marqeta’s 5% gain over the past week has come on the heels of the announcement that its new “banking as a service” offering will include dozens of APIs that will in turn help banking partners issue “demand deposit” accounts (such as current accounts) to customers. According to reports, these accounts will be characterized by early payment options and immediate funding. Coinbase and Branch are among existing customers of the services.

And separately, as reported Wednesday, the Blockchain.com Visa card, which is powered by Marqeta, debuted with 50,000 waitlist signups.

Nubank’s parent company Nu Holdings gained about 1% for the week as Nubank launches its own crypto. The crypto, “Nucoin” will be available to all the bank’s customers starting next year. As for the roadmap, the cryptocurrency “will be the basis for creating a rewards program,” Nubank said, and as PYMNTS reported, with customers accumulating the currency earning benefits such as discounts. Eventually, the bank hopes that nucoins will be traded in the cryptocurrency market.

Not all names in the software sectors ended up in positive territory.

OppFi lost 6% this week, with the release of preliminary results showing that third quarter results were in line with expectations. The turnover is expected to be approximately USD 124.2 million, and adjusted operating profit is expected to be USD 0.8 million. The company also said profitability will rebound in 2023 “based on the strategic credit adjustments made in July, which have already generated significantly lower early default rates that are close to pre-pandemic levels for both new and refinanced loans.”