Digital challenger bank Chime filed an amended Form D with the Securities and Exchange Commission (SEC) this week indicating its most recent funding round has moved a touch higher. According to the filing, Chime has now raised $700 million from 25 investors. The date of the first sale was November 20, 2019.
Chime’s valuation was estimated at around $5.8 billion.
Last fall, it was widely reported that Chime had topped 5 million customers gaining a million new accounts since June 2019. That number has certainly moved higher in the ensuing months.
CEO Chris Britt explained the rapid growth, that has “snowballed” due to “zero-fees” which stands in contrast to traditional banks that love to sneak charges into their customer accounts every time you look the other way.
Chime is not even really a bank, it is a Fintech offering bank-like services by partnering (or reg-arbing) with chartered banks.
Chime works with the Bankcorp Bank and Stride Bank to provide banking services. Credit cards are issued in partnership with a handful of financial service firms.
What Chime does do is provide banking with “no hidden fees” and no bank branches and tellers either. Chime claims that, on average, US households pay over $329 a year in sneaky bank fees at traditional banks. And that is why Chime has now raised $700 million to pull more customers away from traditional brick and mortar banks that need those fees to maintain all of that real estate.