Paya, digital banks help FinTech IPOs with notch gains

Again. A small one, but a gain nonetheless.

FinTech IPO Tracker got a little breath on the ground this week, and managed an increase of 73 basis points, and so far investors can take the relief where it can be found.

And yet June is still on the trail of a loss, with more than 6% so far as we enter the last week of trading. The result so far this year is anything but cheerful, and has a loss of more than 41% so far in a 2022 that most people would rather leave behind.

However, digital banks and payment platforms helped to lead the load over the past week, as several names rose by more than 10% in the last five trading days.

Paya leads the herd

Paya Holdings led the group this time, rising by almost 20% a week. The return so far this year, at just over 6% loss for 2022 so far, is still among the best results in our tracker.

The payment technology company is considering going on sale, and possible suitors have expressed interest. Any possible deal would come on the heels of the bond earlier this year when Paya merged with a specialist acquisition company (SPAC) backed by serial dealer Betsy Cohen.

Read more: Payment technology company Paya Courts Takeover bid

Separately, Paya said this week that it has been chosen by Promise, a software-as-a-service (SaaS) state payment company, as an integrated payment partner. Under the agreement, Promise will partner with utilities and government agencies across the United States to offer payment flexibility in underserved areas and for residents who are in debt or unable to pay their bills in full.

Platform, bankers

Payment platforms were generally among the top “segment” of better results, although company-specific news may not have been on the rise. Flywire was up around 16% during the week, followed by Alkami, which only lagged slightly with an increase of around 15.4% in the same period.

The digital banks – the upstarts who challenged the established financial services, also gave tailwinds to the overall performance.

Nubank was up 14.9%, driven higher by the news that the company is looking for “FinTech coups in Latin America” ​​- partly by taking advantage of the fact that financing is drying up from venture companies and other sources of start-up financing.

Nubank CEO David Vélez said this week that it would make sense for some players in the crowded FinTech market in Latin America to merge or sell.

See more: Nubank is looking for M&A LatAm FinTech coup

“This will enable the survival of the fittest,” he said, estimating that there are probably 40 digital banks in Brazil – and people will have three or four payment apps on their smartphones, not 20.

These gains were somewhat dampened by the fact that some stocks fell to the downside. Opportun decreased by about 12%, followed by Robinhood, also by double-digit at almost 11%. The latter firm’s liquidity position has been declining, and analysts have cut rankings and price targets due to the continued exposure to the lukewarmness of crypto trading.

Read more: Robinhood’s pile of money is eroding as stocks fall to new lows