Only one name in the FinTech IPO Index posted earnings this week, as the overall group was down 1.95% through the past five days. Amid the headlines driving stocks higher and lower, the banking/FinTech partnerships and some forays into card-not-present security efforts held sway.
We start out with Upstart, which ended the week down slightly from $27.21 per share at the beginning of the week to the end of day Thursday (July 25) close at $25.71.
In an announcement this week, the Bank of Elk River, a Minnesota-based community bank, has struck a partnership with Upstart to provide digital-initiated personal loans to customers outside of their typical footprint.
The Bank of Elk River became an Upstart Referral Network lending partner in June 2023, the companies noted. With the Upstart Referral Network, qualified personal loan applicants on Upstart.com who meet The Bank of Elk River’s credit policies will complete an online application and closing process in a Bank of Elk River-branded experience.
SoFi shares had a flat week — $7.27 at the start and the close. As reported here, the company’s Galileo Financial Technologies now offers 3D Secure to help clients protect against card-not-present (CNP) debit and credit card fraud. Galileo 3D Secure Access Control Server is available to clients in the United States, Canada and Latin America.
“With CNP fraud on the rise, the benefits of 3D Secure extend far beyond payment security — it’s about empowering our clients across industries to proactively manage risk while ensuring a seamless customer experience in an efficient, secure payment product,” David Feuer, chief product officer at Galileo, said. 3D Secure, a security protocol developed by the 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, requiring the cardholder to verify their identity through an additional password, a one-time code or other means. 3D Secure also protects businesses from disputes, as payments that are successfully authenticated using the protocol shift the liability of chargebacks from the business to the card issuer, Galileo said.
Sezzle shares started at $84.50 and closed Thursday at $82.65.
Earlier in the month, news came that Sezzle has added Spanish-language capability to its buy now, pay later (BNPL) app and checkout. This capability is meant to appeal to the 40 million Americans who speak Spanish, the company said, and where 22% of Sezzle users speak Spanish at home. By eliminating language barriers and other financial obstacles, Sezzle seeks to equip Spanish-speaking consumers with the necessary tools to effectively manage their finances, including BNPL services.
Charlie Youakim, CEO of Sezzle, expressed the company’s dedication to breaking down financial barriers: “At Sezzle, we’re committed to making financial freedom accessible to everyone, regardless of their background or the language they speak. The introduction of our Spanish translation capability is a significant step towards ensuring that all individuals have the tools they need to thrive financially.”
In one of the few earnings reports to come among our FinTech IPO names, Kaspi released results this week that showed that second quarter revenues were up 36% year on year. Its payments and marketplace platforms together accounted for 68% of consolidated net income, up from 61% in the first half of last year. Revenue from value-added services increased 4.2x YoY.
Within its marketplace platform, eCommerce GMV surged 113% from last year. The company said that grocery segment GMV was 99% higher. 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 timeframe, transaction volumes increased 46% and 44% year-over-year respectively. “Volumes keep growing fast due to growth in Kaspi Pay transactions, rapid adoption of B2B Payments and the ongoing popularity of bill payments,” Kaspi said.
A tough week in the market meant that despite the positive earnings, the stock price was down. Shares of Kaspi started the week at $145.00 and ended at $129.91.
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