Chime revealed on Friday (August 13, 2021) that it secured $750 million in capital through a Series G round round that now values the Fintech Unicorn at $25 billion. Notably, that’s $10 billion more than what the company had reported in October 2020 (when it was valued at $15 billion).
Chime, which is a challenger bank that’s fairly well-known for fee-free banking services, early paydays for customers who make use of direct deposits and an option that allows clients to go negative in their accounts without being charged overdraft fees, noted that it plans to invest the proceeds in scaling its business operations. Chime also intends to introduce new products and services.
It’s worth noting that Chime and other Fintech services such as Square’s Cash App have become quite popular for their ease-of-use — particularly during the COVID-19 crisis, when many consumers have not been visiting physical branch locations. Instead, people are increasingly using online or digital banking platforms. This has led to the California-headquartered Fintech to more than triple its total transaction volume and revenue in 2020.
Recently, Square revealed that it will be acquiring Afterpay for $29 billion in stock – which is one of the largest technology-focused deals ever made.
Primary investors in Chime’s most-recent round include SoftBank, Sequoia Capital Global Equities, General Atlantic, Tiger Global and Dragoneer Investment Group.
The Fintech firm’s latest round has put it in a better position for its potential IPO during H1 2022, according to The Wall Street Journal, which cited sources familiar with the matter.
Chime managed to achieve profitability on an EBITDA basis during the Coronavirus crisis, according to co-founder and CEO Chris Britt. As reported by CNBC, the Fintech has been seeing hundreds of thousands of new accounts being opened every month. Britt told CNBC that growth has been steady but did not comment on just how many users the bank has signed up so far.
Chime had been valued at only $1.5 billion in 2019, which indicates just how fast some companies or businesses are able to scale their operations.
Some Fintechs that have managed to transition into the public market have reported outstanding performance. Recently, digital asset firm Coinbase (NASDAQ: COIN) revealed that it had recorded a 12x increase in turnover when compared to a year back. Coinbase reported $2.23 billion in revenue.
Meanwhile, online lender Upstart Holdings reported revenue surging 11x from just a year back to around $194 million.
As reported by Reuters, Chime has held discussions with various investment banks for a potential stock market floatation that may value the Fintech at over $30 billion.
Chime Financial also reported adding Cynt Marshall, Jimmy Dunne and Sue Decker as independent directors to its Board.
Established by former Visa executive Chris Britt and Comcast Corp alum Ryan King back in 2012, Chime generates revenue by charging a fee from payment processors like Visa whenever a client uses a Chime debit or credit card.
Chime offers financial services via partnerships with brick-and-mortar banks, mainly via a Chime-branded checking account without any extra fees along with a “Spot Me” feature that lets clients go into overdraw without incurring a penalty.