FinTech IPO Index Soars 55% in 2023 as Platforms Notch Triple-Digit Gains

By any stretch of the imagination, the 55.7% rally in the FinTech IPO Index last year was nothing to sneeze at.

And the December surge, at 16.7% … well, that was impressive too.

Yet: A deeper dive shows that of the names we track, the vast majority are still underwater, trading as “busted IPOs,” where stocks trade below the price logged on the first day of trading.

And in fact, as the chart below shows, only four of the more than 40 names in the index are trading above their offer price.

Drill down a bit and only Futu Holdings and BILL Holdings have broached the more than triple-digit mark, as measured from the offer price. A staggering nine names are trading more than 90% below their respective debuts.

All of which means that 2023, for all of its snapback, represented only a partial retracement of a heavy dose of downtrend through the previous months and years.

BNPL Stands Out

The standouts this past year included Affirm, which was up more than 400% through the year, followed by Opendoor Tech, which gathered about 300%. MoneyLion leaped around 250% through the year.

And so we might call 2023 the year of the platform. Affirm’s rally comes in tandem with a holiday-season spending flurry and demand for buy now, pay later options. Through the waning weeks of the year, the company struck several pacts with marquee names in retail, among them Walmart and Amazon.

Opendoor’s boost and the fortunes of other lenders may have been tied, at least in part, to the fact that interest rates, according to conventional wisdom, have peaked. If there are rate cuts in the offing, then loan demand should grow, and real estate demand, especially, should spike as well.

In recent news …

nCino shares, which gained 8% through the final days of the year and was up more then 33% in 2023, said this week the company had seen its mortgage origination and closing solutions in its Mortgage Suite implemented by Camden National Bank. The bank operates primarily in Maine and Massachusetts.

The latest news follows the late December announcement that Salesforce and nCino have expanded their 12-year-old collaboration. The expanded agreement will see nCino deepen its connectivity to Salesforce platform tools — including its financial services cloud — to help financial institutions modernize customer experiences such as onboarding, loan origination, deposit account opening and portfolio management.

In the start to the new year, and as reported by Yahoo Finance, SoFi shares got a downgrade on the Street via Keefe, Bruyette & Woods. Analyst Mike Perito downgraded SoFi from “market perform” to “underperform” and lowered the price target on the stock to $6.50 per share, citing downside risks for EBITDA (a rough proxy for cash flow). The roughly 17% slide in the stock since the last few days of December has offset the more than 120% gain that had been seen in 2023.

Robinhood, which gained 60% through the past annum, saw a stellar December, gathering more than 50%.

As noted here, Robinhood has reportedly been gathering customers from more established brokers like Fidelity and Charles Schwab, with about $1.1 billion in account transfers since Oct. 23, the day it began offering a 1% match on transferred brokerage accounts.