Rally Fades and Platforms Plummet as FinTech IPO Index Loses 0.6%

For the FinTech IPO Index, the rally fizzled quickly.

After a surge into the first few weeks of the new year — notably, double-digit gains last week — the index slipped 0.6% through the past five sessions.

Blame the macro data from this week, that showed a slide in retail spending. Blame the initial volleys of earnings season, where banks signaled some reservations on loan performance moving forward — and they took billions of dollars in reserves for anticipated losses. Layoffs have been dominating headlines — and not just at Amazon and Microsoft.

Platforms Take a Hit

Platforms led the decline this week, and Blend was off 13.7% on the heels of its own layoff-related news that had been relayed earlier in the month.  The company said that the 28% reduction in staffing levels comes as 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) may reshape cross-border payments, specifically the hundreds of billions of dollars in remittances that are sent overseas. The CFPB is mulling restrictions on the fees themselves that are charged on each transaction as workers and families send money to one another across the globe. The CFPB is also examining the differences between money transfer firms over disclosure of exchange rates and fees — and whether those fees are in compliance with the agency’s own remittance rules.

Marqeta gave up 5.7%. The company announced the debut of its new web push provisioning product. With web push provisioning, Marqeta customers can reduce friction at the point-of-sale and enable its users to pay directly from their mobile wallets without requiring them to download a mobile application, as noted in the Thursday release.

Hippo Insurance lost a bit more than 1.2%, in a week that saw the home insurance firm announce that its reinsurance program for 2023 was successful, with better terms than had been seen last year. Rick McCathron, CEO, said in the release, “Our expected loss ratios are rapidly converging to our long-term targets, which drove our strategic decision to reposition our program.”

Not Enough Gainers

Those losses helped offset — at least enough to tip the overall index to the downside — the gains seen in Robinhood, which rose 26%. As PYMNTS reported this week, the company is getting deeper into the news business. As part of that initiative it formed Sherwood Media, a subsidiary that “will be a home for news and information about the markets, economics, business, technology, and the culture of money.”

Paysafe gained 20%, announcing its expansion into the new Ohio online sports-betting market after entering the Maryland iGaming space at the end of last year. The expansion now means the company is offering bettors in Ohio a range of payment options including credit card and debit card deposits, Paysafe’s Skrill digital wallet for both deposits and payouts, and other solutions.

Payoneer gathered 6.8%, stating this week that the company expects to exceed its full year guidance for 2022 and has appointed of Bea Ordonez as the company’s deputy chief financial officer.