According to PYMNTS.com, the FinTech IPO Index lost 6.6% last week with Klarna shares plunging 18.9% following its first quarterly report as a public company. Despite reporting 114 million active consumers (up 32% year-over-year) and 850,000 merchants (up 38%), investors weren’t impressed. Klarna’s trailing 12-month GMV hit $118 billion, up 23%, with average revenue per active consumer reaching $28 and projected Q4 revenue growth exceeding 30%. Meanwhile, Nu Holdings added 4.3 million customers for a total of 127 million users and saw revenues jump 39% to $4.2 billion, yet its shares still declined 1.7%. dLocal processed $10.4 billion in payment volume, up 59%, but its stock fell 11%.
Klarna’s Profitability Problem
Here’s the thing about Klarna’s numbers – they look fantastic on the surface. 114 million active users? That’s massive growth. But investors are clearly asking: when does this translate to sustainable profits? The company’s average revenue per active consumer is just $28, though it jumps to $90 for in-app shoppers and $130 for Klarna Card users. Basically, they’re getting people in the door but struggling to monetize them effectively. The 18.9% drop suggests Wall Street is losing patience with the “growth at all costs” narrative that’s dominated fintech for years.
Bright Spots and Blockchain
Not everything was doom and gloom. Figure Technology Solutions actually gained 3% after reporting that its consumer loan marketplace volumes reached roughly $2.5 billion, up 70% year-over-year. CEO Michael Tannenbaum highlighted their expansion beyond mortgages into private and consumer credit through Figure Connect. Their adjusted net revenues jumped 42% to $156 million. So why did Figure succeed where others failed? They’re showing actual diversification and scaling efficiency in their blockchain-based lending platform. Sometimes specialization beats being everything to everyone.
Robinhood’s Cash Delivery Gamble
In non-earnings news, Robinhood is teaming with delivery platform Gopuff to literally bring cash to people’s doors. For $6.99 (or $2.99 if you have over $100,000 in assets), they’ll deliver cash in a sealed paper bag. Currently available in New York with plans for San Francisco, Philadelphia and Washington, D.C. Now, I’ve got to ask – who exactly is this for? In an increasingly cashless society, this feels like solving a problem that barely exists. But maybe they know something we don’t about customer demand for physical currency convenience.
Investor Sentiment Shift
The broader story here is that fintech investors are getting pickier. Growth metrics alone aren’t cutting it anymore – they want to see path to profitability, sustainable unit economics, and clear competitive advantages. Klarna’s user growth is impressive, but if they can’t convert that into solid earnings, what’s the point? Meanwhile, companies showing focused growth in specific niches like Figure’s blockchain lending are getting rewarded. The days of throwing money at any fintech with big user numbers might be ending. And honestly, that’s probably healthy for the sector long-term.
