A wave of layoffs hit the sector, including a few members of the FinTech IPO Index, in a week that saw its fair share of earnings reports and the Federal Reserve’s fourth rate hike.
The reductions are a response to a macroclimate that few could have predicted a year ago. Mortgage rates are currently at multi-decade highs, which hasn’t helped platforms that promised to revolutionize the housing industry, particularly how acquiring and selling are funded. It’s no longer a buyer’s or seller’s market; in fact, it’s impossible to discern the difference.
According to documents, Upstart has cut 140 jobs, or around 7% of its personnel, due to a “challenging climate” with lower loan volumes. The workers were focused on aiding with loan application processing, according to the SEC 8-K. The stock fell 15%.
The Earnings Parade Continues
Despite the workforce reductions, earnings continue to trickle in. The current economy’s effect has been significantly more beneficial, at least among particular platforms — those not exposed to rate-sensitive industries (such as housing) or with diverse income streams.
Sofi said this week that its “one-stop shop” approach to finance, banking, and personal loans is gaining traction. According to the company, deposits climbed by 86% to $5 billion at the end of the quarter.
According to Sofi management, personal loan demand is strong. Originations increased 71% year on year to $2.8 billion. SoFi’s new member additions were 424,000, and the company’s overall membership stood at 4.7 million at the end of the quarter, up 61% year on year. The stock has been volatile, gaining 18% in intraday trade shortly after the data were revealed then falling practically flat over the next five days.
According to figures released by Remitly on Wednesday (Nov. 2), active clients climbed 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.
