The best and worst performing fintech companies in the AltFi Fintech Index in 2023
At the end of the third quarter, some of the AltFi Fintech Index's individual constituents are on a tear while others...less so, writes Daniel Lanyon
As in any index, the relatively modest 14.3 per cent return of the AltFi Fintech Index in 2023 belies some big movements both up and down for a smaller number of stocks.
In 2023, ten stocks more than doubled in investors' money in the first three quarters of the year while another ten lost more than a quarter of their value over the same time period.
In this article, we take a brief look at these 20 risers and fallers.
Northern Data +324%
Top of the list of biggest risers in the AltFi Fintech Index is Northern Data, more than tripling investors' money. Northern Data, is a German provider of high performance computing infrastructure. This includes data centres for the crypto and blockchain industry as well as other high-growth sectors such as artificial intelligence.
Riot Platforms +167.66%
Next up is another crypto company. Riot Platforms is a Bitcoin miner, buoyed by a rally in crypto assets in 2023 and speculation over the launch of a spot Bitcoin ETF and the nascent softening of regulatory issues surrounding crypto in the US.
Bitfarms, you guessed it, another Bitcoin miner, has also benefitted from the same trend. It also has a bold growth strategy aimed at increasing its monthly output of Bitcoin, currently running at just under 400 Bitcoin per month.
Marathon Digital +135.6%
OK, so you have spotted a trend by now. Yes, Marathon Digital is also a crypto company and yes also a Bitcoin miner. With a market capitalisation of $1.5bn, it is one of the largest.
Hut 8 +134.15%
Not our last crypto company but our last digital asset miner on the list. Hut 8 has also benefitted from the final seal of approval for a merger with US Bitcoin Corp with the deal expected to complete by the end of 2023.
San Francisco-based digital residential real estate platform Opendoor could have topped the list of the best AltFi Fintech Index performers, rising more than 500 per cent in the first seven months of 2023 but has been hit after analyst downgrades.
Qudian is a US-listed Chinese company that was listed back in 2017. The micro-credit provider has, however, fallen substantially since its original listing despite recently turning its first profit.
Next up is another lender. Affirm is one of the largest providers of ‘buy now, pay later’ in the US and has deals with Amazon and Booking.com among many others. The company has a market capitalisation of over $6.2bn and recently reported results better than analysts’ expectations.
Remitly is a digital remittance payments company that helps immigrants send money back to users home countries. The company recently shut down its digital banking app to focus on its strongly growing core business.
Last on our list of best performers is one of the larger constituents in the AltFi Fintech Index Coinbase which has a market capitalisation of $17bn. Despite a strong 2023 performance, the company is still down more than 75 per cent from its blockbuster IPO in 2021.
Zip Co, an ASX-listed 'buy now, pay later' (BNPL) platform is the AltFi Fintech Index’s biggest faller in 2023 so far, weighed down by a push for profitability that has seen it close its UK operations last year and its European arm Twisto.
Payments stock market darling Adyen has been a star performer since its public market debut in 2018. Since 2021 it has seen its share price fall along with the market but more recently it has seen a big drop prompted by Q2 earnings that came in below expectations.
Chinese lender to small businesses Lufax has also seen its share price down by nearly half in 2023 as it continued to see earnings falls owing to what it sees as a declining macro environment.
Nuvei, which counts Ryan Reynolds as an investor, has been hit hard in 2023 by forecasted lower revenue targets as well as the revelation of a large short position being held by short-seller Spruce Point.
New York-listed Chinese fintech infrastructure provider Oneconnect has also been hit by dwindling earnings this year seeing a steady fall in its share price over the course of 2023.
The owner of Cash App and Square, Block has seen some successive hits in 2023. Led by ex-Twitter boss Jack Dorsey, Block is making a big push for profitability after going into the red in 2021.
International Money Express - 29.92%
Focused on the international remittance market, ‘Intermex;’ as it is known was hit in August after the release of its Q2 earnings showing sluggish profit growth despite revenue up nearly a quarter year-on-year.
Lending Club - 28.72%
One of the original fintech lenders on the scene, Lending Club has been hit by a wave of concern around the health of the macro environment and rampant inflation and - yep, you guessed it- a glum outlook in those second-quarter earnings.
Envestnet - 27.68%
Speaking of second-quarter earnings (again), Envestnet has also seen big one day hits to its stock price this year after sluggish revenue growth was reported, below analysts' expectations.
Funding Circle -27.63%
Last up we have UK-listed SME lender Funding Circle which has fallen by just over a quarter this year as investors became nervous about the fate of lenders in a worsening economy and high inflation. This was despite the firm reporting its main UK operation was profitable amid an overall loss for the business.