Lessons learned from last week's fintech earnings: Consumer lending is strong, cryptocurrency trading is weak, and iBuying remains viable
Fintech startups are being funded by investors all over the globe. If third quarter earnings from sector-related public companies are any indication, this is a good sign.
This week's earnings reports reveal a number of fintech companies with impressive operating results. These results delight investors and boost share prices. Private companies find it more than encouraging to see their public champions succeed; strong comps results could help them attract venture capital.
This year is shaping up to be the year of fintech, in both the private and public markets. According to data from CB Insights, global fintech companies experienced a plateau in private investment in 2019 ($46.5 billion) and 2020 ($48.4 trillion), after raising record amounts of $52.9 billion. Global fintech startups have raised $94.7 billion in Q3 this year.
This capital wave has produced a number of new unicorns as investors believe there is plenty of growth for fintech companies in general. Companies like Marqeta, SoFi, and Affirm have reported third quarter results that support the belief that there is still much to be done in the sector's ability to fill the white space and color over incumbents as well as aging systems.
Let's look at a number of successful fintech results from BNPL and other corporate finance players. We'll be discussing Q3 fintech earnings missed after analysing these results and connecting what they might mean for startups in those subsectors.
Hint: When companies released their operating results, they found that trading incomes were no longer the talk of the fintech industry.
Strong consumer lending
Affirm, a public buy-now, pay later (BNPL), company, beat investor expectations in its most recent quarter. This is the first quarter of its fiscal 2022. The recently listed fintech also raised its guidance for the current fiscal year.
Affirm witnessed its BNPL offering active consumers grow by 124% to 8.7million during the quarter. The number of transactions per active customer increased 8% to 2.3. Its real growth came in the number active merchants using its platform. This was due to the adoption by Shopify merchants of Shop Pay Installments.
