FinTech IPO Index Loses 5% as NerdWallet and Lemonade Slip on Earnings

Earnings season’s in full swing and proved to be less than kind to the FinTech IPO Index, which gave up 5%. Double digit declines on the heels of various quarterly reports proved to be common through the last several sessions.

NerdWallet shares gave up 28.1%. The latest earnings results showed that revenues were 5% higher to $150.6 million, with growth in insurance and small- to medium-sized business (SMB)-focused products partially offset by what the firm called “headwinds” in banking and credit cards.

Monthly unique users were up 7% YoY to 23 million. Management noted in the company’s shareholder letter: “In Q2, we hit an air pocket in the cycle: The banking market started to decelerate, as consumer demand for products like high-interest savings accounts waned, but the absence of rate cuts and elevated delinquency rates mean we have not yet seen a corresponding uptick in our Loans business.”

The revenues from credit cards slipped 10% YoY to $46.1 million.

Lemonade shares slipped 23%.

The company said this Wednesday (July 31) that the company is continuing to incorporate artificial intelligence (AI) into its business.

“Investors and analysts often ask about the practical impact of our investments in building our own tech-based insurance tech. I believe our recent quarterly results clearly demonstrate that,” Lemonade Co-founder and Co-CEO Shai Wininger said during the conference call to discuss results.

In addition, Lemonade is working on a new tech program, “L2,” which is designed to enhance things like underwriting, insurance, operations, compliance and product development, Wininger added.

The earnings report showed Lemonade’s revenues increasing 17%, while the company’s loss ratio came to 79%, a 15-point improvement over the second quarter of last year. Revenues, as reported in the company’s shareholder letter, were $122 million. Premiums per customer were up 8% YoY to $387.

Alkami’s latest results showed that in the latest quarter, the company logged $82.2 million in revenues, up from $65.8 million last year. Digital banking clients in the latest quarter stood at 254, up from 218 last year. Registered users were 18.6 million, compared to 15.8 million last year. The subscription revenue mix was 95%. The company’s shares were up 4.3%.

Huize Holdings said this week that it had struck a strategic partnership with New China Life Insurance Company Limited to jointly launch “Bliss,” a customized annuity insurance product. This product is designed to cater to a growing client base with a preference for stable, risk-averse financial solutions.  According to the release, features include rapid cash value growth with flexible payment options and flexible annuity start times, allowing payouts to begin annuity at five years, 10 years, or when the insured reaches 60 or 70 years old.

Shares of Huize were down about 5% through the last five sessions.

SoFi shares gave up 1.5%.

As PYMNTS reported this week, SoFi Technologies’ leadership wants the company to become the “Amazon Web Services” of FinTech.

SoFi’s net income for the period stood at $50 million, a figure that starkly contrasts with the net loss of $95 million reported in the same quarter of the previous year.

The company’s earnings materials also revealed growth of over 40% across both total member additions (up 41%) and products (up 43%) in Q2 relative to the same quarter the year prior. The company’s new member additions were over 643,000 in the quarter, and total members reached nearly 8.8 million by the quarter’s end, up over 2.5 million from the prior year period.

And, per the company’s materials, SoFi’s Technology Platform enabled accounts increased by 23% year over year to 158 million.

Executives also noted that SMBs can now apply and get approved offers from lending partners all on SoFi.

Remitly’s earnings results noted that active customers increased to 6.9 million,  up 36% year over year. Send volume increased to $13.2 billion, from $9.6 billion, up 38%. Revenue totaled $306.4 million, compared to $234 million, up 31%. Remitly shares were up 1%.

Not Everything Was Earnings Related

Beyond earnings-related news, Marqeta said it launched a partnership with Visa and Affirm. The collaboration makes Marqeta the first U.S. processor to enable Visa Flexible Credential, a card offering that toggles between payment methods: debit, credit, cryptocurrency and pay-over-time options.

Marqeta shares were 3.4% lower through the week.

Blend shares gave up 17.3%. In an announcement this week, the company said that it had completed the implementation of its deposit accounts solution at Langley Federal Credit Union, which has $5.3 billion in assets under management. The CU reported a 37% increase in new digital deposit account openings since going live with Blend, with July representing the highest month on record for new digital account openings.