Fintech
FinTech IPO Index Drops 2% Despite New Initiatives
Only one name in the FinTech IPO Index posted earnings this week, while the overall group is down 1.95% over the past five days. Among the names that have pushed shares up and down, bank/FinTech partnerships and some forays into card-not-present security efforts have led the way.
Let’s start with Angrywhich closed the week slightly down, going from $27.21 a share at the beginning of the week, to $25.71 at the end of the day on Thursday (July 25).
In a announcement this week, the Elk River BankA Minnesota-based community bank has partnered with Upstart to offer digital personal loans to customers outside their usual banks.
Bank of Elk River became a lending partner of Upstart Referral Network in June 2023, the companies noted. With Upstart Referral Network, qualified personal loan applicants on Upstart.com who meet Bank of Elk River credit policies will complete an online application and closing process in a Bank of Elk River-branded experience.
Galileo Moves Into Credit Card Fraud Prevention
SoFi The stock had a flat week: $7.27 at the start and close. As reported here, the company Galileo Financial Technologies now offers 3D Secure to help customers protect themselves from card-not-present (CNP) debit and credit card fraud. Galileo 3D Secure Access Control Server is available to customers in the United States, Canada, and Latin America.
“With the rise of CNP fraud, the benefits of 3D Secure go far beyond payment security: it’s about enabling our customers across all industries to proactively manage risk, while ensuring a seamless customer experience in an efficient and secure payment product,” David FireProduct Manager at Galileo. 3D Secure, a security protocol developed by credit card networks, can reduce fraud rates by up to six times compared to non-3DS transactions.
The protocol adds a layer of security to authenticate online credit and debit card transactions by requiring the cardholder to verify their identity through an additional password, one-time code, or other means. 3D Secure also protects businesses from disputes, as payments successfully authenticated through the protocol shift the liability for chargebacks from the business to the card issuer, Galileo said.
Hacksaw Shares started at $84.50 and closed Thursday at $82.65.
At the beginning of the monthNews broke that Sezzle has added Spanish-language functionality to its buy now, pay later (BNPL) app and checkout. The feature is designed to appeal to the 40 million Americans who speak Spanish, the company said, and where 22 percent of Sezzle users speak Spanish at home. By eliminating language barriers and other financial hurdles, Sezzle seeks to provide Spanish-speaking consumers with the tools they need to effectively manage their finances, including BNPL services.
Charlie YouakimSezzle CEO, expressed the company’s dedication to breaking down financial barriers: “At Sezzle, we are committed to making financial freedom accessible to everyone, regardless of their background or language. The introduction of our Spanish translation capability is a significant step in ensuring that all individuals have the tools they need to thrive financially.”
Kaspi Earnings
In one of the few earnings reports to be published among our FinTech IPO names, Woh released results this week that showed second-quarter revenue rose 36% year over year. Its payment and marketplace platforms together accounted for 68% of consolidated net profit, up from 61% in the first half of last year. Revenue from value-added services increased 4.2 times year over year.
Within its marketplace platform, eCommerce GMV increased 113% year-over-year. The company said that the grocery segment GMV increased 99%. Company materials reveal that in the first half of 2024, the company’s payments platform had 721,000 merchants and 13.2 million consumers. During the same time frame, transaction volumes increased 46% and 44% year-over-year, respectively. “Volumes continue to grow rapidly due to the growth of Kaspi Pay transactions, the rapid adoption of B2B payments, and the continued popularity of bill payments,” Kaspi said.
A tough week in the market meant that despite the positive earnings, the stock price was down. Kaspi shares started the week at $145.00 and closed at $129.91.
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