Fintechs are telling shareholders to take a chill pill — and it seems to be working
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A handful of ASX small cap fintechs reached out to their shareholders this morning assuring them things were fine as warnings about a forthcoming credit crunch get louder.
Over the weekend, renowned fund manager Raoul Pal warned COVID-19 would cause history’s worst insolvency event — even worse than the Great Depression.
One already feeling the pain is Raiz Invest (ASX:RZI). The company has seen its funds under management drop by 20 per cent in a month to $371.5m.
CEO George Lucas admits 64 per cent of Raiz’s customer base are millennials, which are more likely to be affected by the crisis.
But Raiz says things are fine so far because its active customers only fell 2.4 per cent and it is in a strong cash position having raised $7.5m late last year.
Small business lender Quickfee (ASX:QFE) gave a similar assurance to investors and shares rallied 16 per cent this morning.
While Quickfee has seen a modest increase in arrears on payment plans, it thinks it’s assessments of creditworthiness of new lendees will hold it firm. Being cloud-based has helped the fintech to continue to operate.
While it did not give February to March comparisons, its quarterly lending from March 2019 to March 2020 rose 19 per cent in Australia and 61 per cent in the US.
MoneyMe’s (ASX:MME) ‘take a chill pill’ advice was even more effective as it climbed over 20 per cent.
The company says it has met its IPO prospectus revenue guidance because it has low exposure to retail customers but high exposure to borrowers eligible for the JobKeeper payment.
MoneyMe also says it has net operating cash flows and ample cash in the bank — enough to last into the 2022 financial year.
Shares in wealth management and brokerage service SelfWealth (ASX:SWF) rose by nearly 25 per cent. It’s seen hefty quarter-on-quarter growth in several metrics including active traders and operating revenue.
The company said it was operating smoothly with no negative impact from COVID-19.
Finally, buy now pay, later stock Sezzle (ASX:SZL) says it saw a record first quarter surpassing 1 million customers and witnessing strong quarterly growth in active merchants as well. Its shares also rallied this morning.