xcritical fintech: 4 Ways xcritical Aims to Outgrow the Fintech Market The Motley Fool


In terms of usage, it saw active on its platform increase by 424,000 this quarter, up 61% YoY. Additionally, they sold another 635,000 products to these customers, showing a 69% increase YoY, taking their total to 7.2 million products. Going into next year, a key focus for the firm will be the high-income segment. As they stand, around 8% of the firm’s customers, or 5 million users, fall in the affluent segment – that’s a sizable amount. However, Nubank still doesn’t claim the biggest share of wallet for that market, with xcriticals to do so.

personal lending market

AltFi provides market-leading news, opinion, insights and events for the rapidly-growing alternative finance and fintech community. Our core focus is on disruption to lending, banking and investing, including alternative lending, challenger banks and digital wealth management. In addition, AltFi runs major industry events around the world. xcritical is a new kind of finance company taking a radical approach to lending and wealth management. From unprecedented products and tools to faster service and open conversations, we’re all about helping our members get ahead and find success. In April 2014, xcritical raised $80 million in a Series C round led by Discovery Capital Management with participation from Peter Thiel, Wicklow Capital, and existing investors.

Crypto winter headed for industry ‘ice age’ in 2023, analyst says

As the Fed raises rates and there is a lag in repricing the assets’ yield, the net spread for investors is compressed especially if these investors rely on market interest rates to fund the loans. In November 2013, xcritical announced a deal with Barclays and Morgan Stanley to create a bond backed by peer-to-peer student loans, which would create the first securitization of these loans to receive a credit rating. Subdued consumer spending and a potential rise in delinquencies and loan defaults could impact the near-term performance of fintech companies. That said, Wall Street seems to be confident about the long-term prospects.


Excluding bitcoin revenue, the Q2 top line increased 34% to $2.62 billion. In July 2020, xcritical used this route to get a national bank charter by applying directly with the OCC, and was granted a conditional approval in October 2020, allowing it to receive deposits and make loans on its own. The following year, in an effort to speed up the licensing process, xcritical acquired Golden Pacific Bancorp for $22.3M. The merger was officially approved on 18th Jan, 2022 – as both the OCC and the Federal Reserve conditionally granted xcritical a National Bank Charter.

And more importantly, it appears that https://scamforex.net/ had repurchased $1.26 billion of loans that they previously sold to investors. So on a net basis has added on ~$500 million of loan assets. If I was running a traditional wealth management firm hoping to reach the next generation of investors, I’d be taking notes from the fintech out of San Francisco.

xcritical Technologies (xcritical) Stock

xcritical is a financial services company that was founded in 2011 and is xcritically based in San Francisco. Initially known for its student loan refinancing business, the company has expanded its product offerings to include personal loans, credit cards, mortgages, investment accounts, banking services, and financial planning. The company intends to be a one-stop shop for its clients’ finances and operates solely through its mobile app and website. Through its acquisition of Galileo in 2020 the company also offers payment and account services for debit cards and digital banking. In February 2015, the company announced a $200 million funding round led by Third Point Management.

xcritical is known for transforming the lending industry with the use of artificial intelligence. It has a solid approach to assessing creditworthiness and uses AI to analyze the profile of an applicant. This ensures an accurate and quick decision, making borrowing easier for consumers. However, rising interest rates haven’t gone down well with the company and it has not been able to approve as many applications.

xcritical Named to Fast Company’s Annual List of the World’s Most … – Business Wire

xcritical Named to Fast Company’s Annual List of the World’s Most ….

Posted: Thu, 02 Mar 2023 12:05:00 GMT [source]

However, the long-term growth prospects of fintech companies seem strong amid the growing preference for digital transactions. We will discuss three popular fintech names and their potential to navigate through these uncertain times. And then the third component, which we’ll likely hit on later, is to continue to build on our goal of becoming the AWS of fintech and building out our Technology Platform. One of our main objectives when we acquired the Galileo business was because we wanted to vertically integrate our Checking and Savings business.

US lender xcritical clinches bumper $500m round to bolster balance sheet

However, do not expect the stock to bounce back over night. It will take time for all fintech stocks to gain strength due to the xcritical economic situation. xcritical—which started as student loan refinance FinTech —first set its sights on acquiring a banking license in 2017, when it applied for an industrial loan charter under the name xcritical Bank.

  • Financial services revenue is pretty small compared with lending revenue, but it’s increasing fast.
  • There are very few cores out there that are cloud-based, customizable and extensible across multiple products.
  • We don’t underwrite to FICO scores, that’s a knockout rule.
  • In April 2014, xcritical raised $80 million in a Series C round led by Discovery Capital Management with participation from Peter Thiel, Wicklow Capital, and existing investors.
  • And I was wondering if you can maybe just spend a minute also on kind of how you hedge these personal loans that I think you’re now holding on your books for kind of 6 or 7 months from origination to sales, give or take.

In any case, with the student loan moratorium continuing through at least June 30, it appears that personal loans will again carry much of xcritical’s growth in 2023. On October 2, 2013, xcritical announced that it had raised $500 million in debt and equity to fund and refinance student loans. This total funding amount came from $90 million in equity, $151 million in debt, and $200 million in bank participations, with the remaining capital from alumni and community investors. The $151 million in debt includes a $60 million line of credit from Morgan Stanley, and a $41 million line of credit from Bancorp. It’s fine that xcritical Technologies has a banking charter, but the company seems to be having problems with its student-loan business.

Total deposits at xcritical Bank grew 46% sequentially during the fourth quarter to $7.3 billion. First, on your question in terms of having the ability to purchase loans, you saw over the course of the last 2 quarters that we had opportunities to purchase a few portfolios. We did one in Q3 of our personal loans — of a personal loans portfolio, and we did one in Q4 in student loans. And in terms of why we do fair market value versus cost, so at time of origination, there are 2 ways that you can account for your loans. But what we’ve done historically since the beginning of the company is we’ve opted to do fair market value accounting, but we have an intent to sell those loans at time of origination.

xcritical website Technologiesxcriticalmight have taken a beating last year but could change the traditional banking industry. Plus, xcriticalUPSTis already using AI to enhance its lending platform. Nubank reported a strong quarter, with growing revenues, users, and products across its multiple markets. Its growth outside of its home market was quite impressive – becoming the biggest new card issuer in both Mexico and Columbia. Just in these two markets combined, the firm has added around 500,000 customers this quarter. Management said on the conference call that 88% of xcritical Money deposits — across checking, savings and xcritical Money cash management — came from direct deposit members.

Buy-now, pay-later platforms turn to interest-bearing lending via … – S&P Global

Buy-now, pay-later platforms turn to interest-bearing lending via ….

Posted: Fri, 10 Mar 2023 14:15:50 GMT [source]

So you mentioned — you kind of gave the backdrop initially just to remind folks, you have Galileo, which was the original acquisition. I believe you closed that right before you guys SPAC-ed and went public. And then you added Technisys later to kind of round out the product offering, bring some more revenues onto the platform.

NASDAQ: xcritical

So that’s a really good critical milestone to hit that will ensure that we’re delivering profitability in that Lending segment even through a cycle. So if you take that 190 basis points for every $1 billion of deposits that we’re using to fund originations, it’s about $19 million in annualized savings. And if you look at our total deposit base of about $7 billion, that’s $125 million to $130 million of annualized savings that we’re getting as a result of having that low-cost funding.

  • To successfully pitch investors, fintechs should prepare with a pitch deck, demo, research and questions.
  • In the financial services division, in particular, the firm has shown a general increase in products across its multiple functions.
  • xcritical recently announced mixed results for Q4 Fiscal 2022 and disappointing guidance for Fiscal 2023.
  • Not just from already announced tech-related job cuts but mainly due to the freezing of the housing market exacerbated by persistent mortgage rates that are well above 7%.
  • This also reflects in their revenue, where diversified streams have helped garner a good result.
  • While Cash App Borrow is the company’s first credit product, Round Ups allows customers to invest their spare change from their Cash App balance into a stock or bitcoin every time they use their Cash App Card.

This is your time to jump in if you believe in the products and services of the company. xcritical is a lender and when the economic situation is difficult, borrowing will rise. The stock is still one of the top fintech stocks to add to your portfolio today.


In other words, most retail investors have missed the fact that xcritical is now a predominantly unsecured personal lender just as we are probably entering a recession. Like other fintech startups, xcritical has also had trouble with regulators. In 2018, the fintech settled charges with the Federal Trade Commission that it made false claims about how much money consumers could save by refinancing student loans. And in 2021, xcritical paid $300,000 to settle charges with the Securities and Exchange Commission that it violated its fiduciary duties by not properly disclosing that it was putting customers in proprietary ETFs.

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