For the FinTech IPO Index, the rally quickly fizzled out.
After rising in the first few weeks of the new year – notably double-digit gains over the past week – the index has slipped 0.6% over the past five sessions.
Blame this week’s macro data, which showed a fall in retail spending. Blame the early salvos of the earnings season, in which banks signaled some reservations about future credit performance — and they took billions of dollars in reserves for expected losses. Layoffs dominate the headlines – and not only at Amazon and Microsoft.
Platforms are hit
Platforms led the decline this week, with Blend shedding 13.7% after its own layoff news was released earlier in the month. The company said the 28% headcount reduction is part of an effort to “right-size” Blend’s cost structure.
Remitly lost 13.6%. As PYMNTS reported this week, the Consumer Financial Protection Bureau (CFPB) could transform cross-border payments, particularly the hundreds of billions of dollars in remittances sent overseas. The CFPB is considering limits on the fees themselves, charged for each transaction when workers and families send money to each other around the world. The CFPB also examines the differences between money transfer companies in terms of disclosure of exchange rates and fees – and whether those fees comply with the agency’s own transfer rules.
Marqeta gave up 5.7%. The company announced the debut of its new web push delivery product. With web-push delivery, Marqeta customers can reduce friction at the point-of-sale and allow their users to pay directly from their mobile wallets without having to download a mobile application, as mentioned in Thursday’s announcement.
Hippo Insurance slipped just over 1.2% in a week in which the home insurance company announced its 2023 reinsurance program was successful, with better terms than a year earlier. Rick McCathron, CEO, said in the press release, “Our expected loss rates are rapidly converging on our long-term goals, which has driven our strategic decision to reposition our program.”
Not enough winners
Those losses helped offset Robinhood’s gains, which rose 26% — at least enough to tip the overall index lower. As PYMNTS reported this week, the company is getting deeper into the news business. As part of this initiative, Sherwood Media was formed, a subsidiary that “will be a home for news and information about markets, economics, business, technology and the culture of money.”
Paysafe is up 20% and announced its expansion into Ohio’s new online sports betting market after entering Maryland’s iGaming division late last year. The expansion now means the company offers Ohio bettors a range of payment options, including credit and debit card deposits, Paysafe’s Skrill digital wallet for deposits and withdrawals, and other solutions.
Payoneer rallied 6.8% and said this week that the company expects to beat its full-year 2022 guidance and has named Bea Ordonez as the company’s deputy chief financial officer.
PYMNTS Data: Why Consumers Are Trying Digital Wallets
A PYMNTS study, New Payments Options: Why Consumers Are Trying Digital Wallets, finds that 52% of US consumers have tried a new payment method in 2022, with many choosing to try digital wallets for the first time.
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