A rash of layoffs rocked the industry, including a few members of the FinTech IPO Index, in a week that saw its share of earnings releases and a fourth rate rise from the Federal Reserve.
The cuts are a reaction to a macroclimate that few could have imagined a year ago. The fact that mortgage rates are presently at multi-decade highs has not helped platforms that promised to disrupt the housing business, particularly how purchasing and selling are financed. It’s no longer a buyer’s or seller’s market – in fact, it’s difficult to tell which is which.
In filings, Upstart stated that it has slashed 140 positions — around 7% of its workforce — owing to a “difficult environment,” which is decreasing loan volumes. According to the SEC 8-K, the personnel was focused on assisting with loan application processing. The stock dropped 15%.
The Earnings Parade Goes On
Earnings continue to flow in despite the employee reductions. At least among certain platforms — those not exposed to rate-sensitive sectors (such as housing) or with diversified income streams — the present economy’s influence has been noticeably more positive.
This week, Sofi claimed that their “one-stop shop” approach to financing, banking, and personal loans is gaining steam. Deposits increased by 86% to $5 billion at the conclusion of the quarter, according to the business.
Personal loan demand is robust, according to Sofi management. Year on year, originations grew 71% to $2.8 billion. SoFi’s new member additions were at 424,000, and total members stood at 4.7 million at the end of the quarter, increasing 61% year on year. The stock has been erratic, rising 18% in intraday trade soon after the findings were released and then settling nearly flat over the next five sessions.
Remitly’s own data revealed on Wednesday (Nov. 2), indicated that active clients increased 49% year on year to 3.8 million, while send volume increased 44% year on year to $7.5 billion.
Separately, OneConnect’s stock fell 19% this week. The drop occurred after the business disclosed that it had received a letter from the New York Stock Exchange stating that it had fallen below the NYSE’s ongoing listing criteria owing to the trading price of OneConnect’s American depositary shares.
