Fintech IPO Index activity centred on deal news in early April 2024, with the index falling 2.9% over the week. The Fintech IPO Index drop came even as the two largest movers, Nuvei and Doma Holdings, gained ground on news of agreed take-private transactions, while Sezzle shares plunged 29.6% on disclosed short-seller interest.
Fintech IPO Index Performance for the Week
The Fintech IPO Index dropped 2.9% over the week, with deals dominating the headlines. Nuvei shares gained 2.4% after announcing an agreed take-private deal with Advent International. Doma Holdings shares jumped 37.4% on its agreed merger with Title Resources Group. nCino shares fell 2.8%, Alkami fell 3.4%, and Janover lost 15.3% across the prior five sessions. Sezzle was the largest decliner at 29.6%, as reported by PYMNTS, which tracks weekly performance across the Fintech IPO Index basket. The week’s two largest disclosed deals, the Nuvei take-private and the Doma merger, both moved component stocks higher even as the basket overall closed lower.
1. Nuvei to Go Private in $6.3 Billion Advent International Deal
Canadian payments company Nuvei announced on 1 April 2024 that it had entered into a definitive arrangement agreement to be taken private by Advent International in an all-cash transaction valuing the company at an enterprise value of approximately $6.3 billion. Shareholders will receive $34.00 per share in cash, which represents approximately a 56% premium over Nuvei’s unaffected closing price of $21.76 on 15 March 2024 and a 48% premium over its 90-day volume-weighted average trading price as of that date.
Nuvei founder Philip Fayer, alongside existing shareholders Novacap and Caisse de dépôt et placement du Québec (CDPQ), supported the transaction as holders of multiple voting shares. Following completion, Fayer, Novacap, and CDPQ will indirectly own or control approximately 24%, 18%, and 12% of the equity in the resulting private company. Fayer continues as Chair and Chief Executive Officer, and Nuvei remains headquartered in Montreal. The arrangement closed on 15 November 2024, and Nuvei delisted from both the Toronto Stock Exchange and Nasdaq.
Nuvei’s fourth-quarter 2023 results showed total volumes increased 59% to $203 billion for the full year, and 53% to $61.8 billion in the fourth quarter alone. Pro forma fourth-quarter revenue growth for the company’s B2B, government, and ISV channels grew 19% year-over-year to $59 million, representing 18% of consolidated revenue in the quarter. In a statement on the deal announcement, Fayer said the transaction marked a new chapter for Nuvei and that bringing in a partner with extensive payments-sector experience would support continued development. Nuvei was one of the Fintech IPO Index constituents to gain on the week of the announcement.
2. Doma Holdings Agrees to $6.29 per Share TRG Take-Private
Real estate technology company Doma Holdings announced on 28 March 2024 that it had entered into a definitive agreement and plan of merger with Title Resources Group, a US title insurance underwriter. Under the terms, TRG will acquire all outstanding shares of Doma for $6.29 per share in cash, which represents approximately a 43% premium over Doma’s closing share price on 27 March 2024 and a 33.9% premium over its trailing 30-day volume-weighted average price.
Doma’s underwriting division, Doma Title Insurance, and its technology division, expected to be renamed Doma Technology LLC, will operate as TRG subsidiaries following completion, with Doma Technology operating on a separately-capitalised basis. The transaction received unanimous approval from Doma’s Board on the unanimous recommendation of a special committee comprised entirely of independent directors. The transaction was structured as conditional on an investment by Lennar into TRG and the consummation of certain arrangements with Hudson Structured Capital Management, Doma’s existing term loan agent, which agreed to amendments to the existing credit facility. TRG secured a senior secured term loan facility of $125 million to fund the acquisition. Doma stockholders approved the transaction on 27 August 2024. Doma shares jumped 37.4% on the week of the announcement, ranking it the largest single-week gainer in the Fintech IPO Index.
3. nCino and Alkami Announce Product Updates
nCino expanded the omnichannel functionality of its consumer banking solution for banks and credit unions during the week. The company stated the expansion helps bankers engage with consumers across channels and simplifies the multi-product origination experience through more intuitive workflows for front-end users and branch bankers. nCino shares fell 2.8% on the week.
Alkami announced a partnership with SWIVEL covering loan payment processing capabilities. Through Alkami’s single sign-on integration with SWIVEL’s Transaction Enablement Platform, Alkami’s bank and credit union clients gain access to SWIVEL’s loan payment capabilities. SWIVEL’s payment processing solution allows financial institutions to originate, track, and process automated clearing house and card-based payments. Alkami shares fell 3.4% on the week. Both nCino and Alkami are tracked in the Fintech IPO Index.
4. Janover Reports Revenue and Traffic Growth
Janover reported that organic website traffic increased more than 70% in 2023 compared with 2022, with over 100 million organic Google impressions for the year ending December 2023. The company stated that the traffic growth had driven inbound loan applications and lender engagement on its commercial real estate platform. In its fiscal 2023 earnings report, Janover stated that revenue per transaction increased 54% year-over-year for the year ended 31 December 2023. Small business transaction revenue, which includes Small Business Administration loans, increased more than 100% for the second consecutive year. Janover shares lost 15.3% over the prior five sessions during the Fintech IPO Index reporting week.
5. Sezzle Shares Plunge on Short-Seller Interest
Sezzle shares fell 29.6% across the week, the largest decline among Fintech IPO Index constituents. The drop followed an Australian Financial Review report in which US short seller Nathan Koppikar of Orso Partners, who manages an estimated $410 million in assets, said the firm was considering Sezzle as a possible short position. Koppikar told the publication that Sezzle’s move from the Australian Securities Exchange to a Nasdaq listing had increased Orso Partners’ interest in the buy-now-pay-later company. Sezzle had previously traded primarily on the ASX before adding its Nasdaq listing.
The Fintech IPO Index movement on the week sat alongside the broader fintech M&A environment captured in the corporate acquisitions category at FintechBits, following the first-half 2023 deal slowdown.
