This week was dominated by earnings reports from fintech firms specializing in connecting supply and demand, such as those in lending and modernizing payments between merchants and consumers. Despite ongoing stock volatility, the FinTech IPO Index climbed 1.7%.

FinTech IPO Index Highlights

Katapult saw its stock soar by 18.5% this week. The company reported that Katapult Pay gross originations grew over 150% year-over-year to $55.6 million, with 55.9% of these originations in Q1 2024 coming from repeat customers. Total revenue increased by 18.1% to $65.1 million.

Blend Labs experienced a share increase of just over 15%. Their Q1 2024 earnings revealed total company revenue of $34.9 million, comprising $23.8 million from the Blend Platform segment and $11.1 million from the Title segment. Within the Blend Platform, mortgage suite revenue declined by 15% year-over-year to $15.1 million, while consumer banking suite revenue rose by 29% to $6.7 million. Professional services revenue increased by 21% to $2.1 million.

Paysafe saw a 15.2% rise in its stock. The company’s earnings report indicated an 11% increase in revenue from its Merchant Solutions segment, driven by strong eCommerce performance and SMB client demand. Digital wallet-related revenue increased by 5%, mainly due to growth in the gambling sector. Overall, consolidated revenue rose by 7% to $418 million on a constant currency basis, with total payment volume up 7% to $36.1 billion, and transactions per active user increasing by 14%.

Open Lending shares climbed 7.8% following their partnership with Core Specialty Insurance Holdings, which will now provide credit default insurance policies for Open Lending’s Lenders Protection platform.

Robinhood saw a modest increase of 3.4% over the past week. The company exceeded Q1 profit expectations, driven by strong cryptocurrency trading volumes and a 22% rise in net interest revenue to $254 million. Retail traders, optimistic about economic prospects, have reentered the market, resulting in a 59% increase in transaction-based revenue.

Oportun shares rose by 2.7%. The company’s official Q1 report on May 9 confirmed preliminary results, showing aggregate originations of $338 million, down from $408 million last year. The portfolio yield was 32.5%, an increase of 113 basis points from the previous year, and the annualized net charge-off rate improved to 12% from 12.1% a year ago and 12.3% in the previous quarter.

Declines in the Index

dLocal experienced a significant decline, with shares dropping by 27%. Despite a 49% year-over-year increase in total payment volume to $5.3 billion and a 34% rise in revenue to $184.4 million, gross profit margins were pressured by renegotiated terms with a top merchant and higher payout volumes. Consequently, operating income fell by 32% year-over-year.

Nu Holdings reported the addition of 5.5 million customers in Q1, bringing its global total to 99.3 million by the end of March. The company, now the fourth-largest financial institution in Latin America by customer count, saw monthly average revenue per active customer grow by 30% year-over-year. However, its shares slipped by 0.6%. The NPL ratio for its Brazilian consumer credit portfolio was 5%, consistent with expectations and historical patterns.

Expensify added unlimited virtual cards to its spend management platform. The new Expensify Visa Commercial Card allows businesses to manage expenses across employees and merchants, setting fixed or monthly spending limits for each card. Despite this innovation, the company’s shares fell by 3.4%.

In summary, the fintech sector showcased a range of performances, with several companies delivering strong earnings that boosted the FinTech IPO Index, while others faced challenges that impacted their stock prices.

Source: pymnts.com

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A memorandum of understanding (MoU) between Australia and Thailand to boost fintech capabilities marked the conclusion of a successful week for Australia at Money 20/20 Asia in Bangkok.

Key Agreement Signed

At the event, Chonladet Khemarattana, President of the Thai Fintech Association, and Brian Collins, Deputy Chair of FinTech Australia, signed the MoU. This agreement will see both countries collaborate to enhance their fintech sectors.

The signing was witnessed by key figures from the Australian and Southeast Asian fintech industries, including venture capitalists and corporate innovation and financial services representatives.

Growing Fintech Ecosystem

“Thailand’s fintech sector is one of the fastest growing in Southeast Asia,” stated Dr. Angela Macdonald PSM, Australian Ambassador to Thailand. “Significant investment and regulatory support have spurred innovations in payments, lending, and more. Coupled with Australia’s dynamic fintech landscape, this partnership represents a significant step in digital economy collaboration with Thailand.”

Australian Fintechs Shine at Money 20/20 Asia

Austrade hosted a delegation of 16 Australian fintech companies and nearly 30 Australian fintech leaders at Money 20/20 Asia, the premier fintech event in the region. The delegation explored opportunities and partnerships in Thailand and across Southeast Asia, with companies like EzyRemit and Privasec already collaborating with Austrade on regional projects.

Event Highlights:

• Aus-Thai Fintech Connect Networking Event: Over 100 guests from across Southeast Asia participated, eager to collaborate with Australian fintechs.
• Expert Speakers: Thirteen Australian fintech leaders shared their insights and expertise as speakers at the event.
• Facilitated Meetings: Austrade arranged one-on-one meetings between Australian fintechs and key Southeast Asian banks and financial institutions.

Amelia Walsh, Austrade’s Trade Commissioner in Bangkok, emphasized the importance of the event for strengthening digital economy ties between Australia and Southeast Asia. “Hosting the Aussie fintech pitch at the beginning of the week was a highlight,” she said. “I was impressed by how well our companies articulated their value propositions and aligned with regional ambitions. I look forward to the continued growth of Australian fintechs in Southeast Asia.”

Opportunities in Southeast Asia

The MoU underscores the significant growth opportunities for Australian fintechs in Thailand and Southeast Asia. Brian Collins, Deputy Chair of FinTech Australia, noted the region’s rapid adoption of various fintech solutions. “Many of our members are interested in this part of the world due to the swift adoption of fintech. We look forward to collaborating with the Thai FinTech Association to improve outcomes for both regions.”

Chonladet Khemarattana, President of the Thai Fintech Association, highlighted the potential mutual benefits of the partnership. “With Thailand emerging as a hub for fintech innovation, this collaboration promises to drive mutual benefits and foster cross-border synergies. We are eager to work closely with FinTech Australia to leverage our respective strengths and enhance outcomes for both regions’ fintech ecosystems.”

This partnership represents a strategic move to enhance fintech capabilities and drive innovation in both countries, fostering a robust and collaborative digital economy.

Source: austrade.gov.au

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PB Fintech witnessed a 2% decline in its stock price, reaching Rs 1,313.65 per share, as approximately 8.4 million shares, equivalent to 1.86% of outstanding shares, were exchanged via block deals on the exchanges. By 9:44 AM, the volume surged to 9 million shares collectively on both exchanges, while PB Fintech’s stock price dipped by 0.56% to Rs 1,333 apiece, contrasting with a 0.22% decline in the S&P BSE Sensex.

Executive Share Sales

On May 16, PB Fintech announced that its Chairman and CEO, Yashish Dahiya, alongside Vice Chairman and Whole-time Director, Alok Bansal, intended to sell partial stakes in the company. Dahiya plans to sell up to 5.4 million equity shares, while Bansal aims to divest up to 2.97 million equity shares. Proceeds from the sale will be allocated primarily towards taxes on current and future ESOP exercises.

Following the sale, Dahiya will retain a 4.83% stake, while Bansal will hold a 1.63% stake in PB Fintech on a fully diluted basis. The company clarified that no further share sales are planned by the duo for at least one year.

Company Profile and Financial Performance

PB Fintech is actively involved in providing integrated online marketing and IT consulting services, primarily for the financial services industry, including insurance. The company operates Policybazaar, India’s largest digital insurance marketplace, and Paisabazaar, which offers lending-related services.

In Q4FY24, PB Fintech reported a net profit of Rs 60.19 crore, marking a significant improvement from the Rs 9.34 crore loss in the corresponding period of the previous year. The company’s revenue from operations surged by 25.4% year-on-year to Rs 1,090 crore in Q4 FY24, compared to Rs 869 crore in Q4 FY23.

For the entire fiscal year, PB Fintech’s net profit stood at Rs 64 crore, contrasting with the Rs 488 crore loss in FY23. The company’s consolidated operating revenue rose by 34% year-on-year to Rs 3,437 crore.

Analyst Perspectives

Analysts at Nuvama Institutional Equities raised their FY25/26 Ebitda estimates significantly to accommodate higher growth and improved profitability. However, they maintained a ‘Reduce’ rating on the stock due to its rich valuation, revising their target price to Rs 1,160.

Keynote Capital downgraded PB Fintech’s stock to ‘Reduce’ from ‘Buy’, citing that most of the positives appear to be priced in. Despite acknowledging the company’s positive momentum and profitability, the brokerage believes that current market expectations may be overly optimistic.

PB Fintech continues to navigate its growth trajectory amidst strategic initiatives and evolving market dynamics, as reflected by varying analyst viewpoints.

Source: business-standard.com

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