Fitch improves ID Finance’s outlook from negative to stable and confirms its rating after solid Q1 results

• During the first three months of the year, ID Finance revenue globally was €43.4M, 60% more than during the same period of 2021
• ID Finance business in Mexico signed a new funding agreement totalling €1.9M with US platform Percent.

Fitch Rating has improved ID Finance outlook from negative to stable after the company closed Q1 with solid results. In addition, Fitch has affirmed the rating of the company’s non-guaranteed long-term debt -IDFinance Spain SAU 9,5% 20/23 Bond- listed on Frankfurt, at ‘B-‘ with a Recovery Rating of ‘RR4’.

The improvement of ID Finance’s outlook reflects the consistency of the company’s operative margins in Spain, its lean cost structure, a short-dated loan portfolio, moderate market risk and an experienced management team, as the rating agency states in its latest report.

Positive results in Q1

ID Finance has closed the first quarter with a 60% year-over-year increase of its global revenue up to €43.3M, after registering its best yearly results ever in 2021. YoY credit issuance grew by 70% up to €91.8M, due to a stable credit demand, both in Spain and Mexico.

Robust result in Spain

In Spain ID Finance’s performance has been particularly positive during the first three months of the year. Revenue in this market grew 59% YoY up to €28.6M, whereas net profit increased 62%, from €1.8M in Q1 of 2020 to €2.9M.

Overall, in 2021, the Spanish business hit a record result after increasing four times its profit up to €10M. In this regard, the result of Q1 shows that the steady growth trend continues.

Besides, with an equity to assets ratio of 19%, ID Finance keeps a strong and healthy equity position, that significantly exceeds the industry’s average level of around 15%.

Strong investor support

Investors keep showing interest in ID Finance, showcasing the appeal and potential of the company, especially after the launch in Spain last year of neobank Plazo.

In this sense, ID Finance Mexico has raised $1.9M of new capital (€1.7M) from US platform Percent. This way the company secures an additional source of investments for the Mexican business, complementary to Mintos, Europe’s leading corporate debt platform.

In addition, in November of last year, ID Finance successfully closed its second crowdfunding round on Crowdcube. Overall, it raised €3.3M thanks to an excess demand of three times the initial goal of €1M, thus reaching a pre-money valuation of €220M. It was one of the biggest equity crowdfunding rounds of a Spanish company in 2021, aimed at further fuelling the growth of neobank Plazo.

2021, a key year for ID Finance

In 2021, ID Finance started running in record time neobank Plazo which was successfully launched in Spain in June. Since then, the use of Plazo’s finance solutions has been growing consistently. Up to date, Plazo has already issued 100,000 free Mastercard debit cards.

Besides, in 2021, overall ID Finance closed the best result of its history. Globally revenue increased 37%, up to €142M, thus reinforcing its positioning as one of the few profitable Fintech in Spain and Mexico. The strong growth of the business has come with a significant increase in qualified talent, one of the key pillars of ID Finance since its inception. The team already excedes the number of 600 employees. Therefore, the company has expanded its working spaces both in Mexico and Spain.

In addition, at the beginning of 2022, ID Finance has been included for fifth year in a row in the ranking of FT 1000 as one of the 13 fastest growing Fintech in Europe and the only Spanish one of this sector, which additionally confirms the company’s good performance.

Boris Batin, co-founder and CEO of ID Finance has said: “The improvement of Fitch’s outlook reinforces the solvency and consistency of our business model, which continues showing strength. At ID Finance, the sustainability of the business has always been one of our priorities. Being a profitable company, we can keep fuelling growth and keep developing our neobank Plazo”.