Chime CEO Chris Britt
Chime has raised a new $750 million Series G financing round that values the fintech company at $25 billion — $10 billion higher than the last reported valuation of $15 billion as of October 2020, according to PitchBook data.
Chime, a so-called “challenge bank” known for free banking, early paydays for those who deposit their earnings directly, and a feature that allows users to go negative on their accounts with no overdraft fees, plans to invest the new capital in the scaling up operations and launching new products and services, the company said.
It, along with Square’s Cash app and a few other players, has become viral hits for its ease of use – especially during the pandemic, when many avoided going to branches and switched to online banking services. As a result, the San Francisco-based company more than tripled its transaction volume and revenue last year.
Last week, Square said it is issuing $29 billion worth of shares to Afterpay in one of the largest tech deals ever.
Primary investors in Chime’s latest round include SoftBank, Sequoia Capital, General Atlantic, Tiger Global and Dragoneer Investment Group. It also positions the company for a possible IPO in the first half of next year, according to the Wall Street Journal, citing sources familiar with the matter.
Chime made the move to profitability on an EBITDA basis during the pandemic, co-founder and CEO Chris Britt told The Washington City Times last September. The company adds hundreds of thousands of accounts per month, he said at the time, but declined to say how many users it has in total.
Amazingly, Chime — whose name is meant to evoke a calming sound — was valued at just $1.5 billion in early 2019, just two years ago. Founded in 2012, the story of the company shows how quickly startups can scale if the product is compelling.
In the public market, fintech revenues are staggering. Earlier this week, cryptocurrency exchange Coinbase reported a 12-fold increase in revenue from a year earlier to $2.23 billion. Not to be outdone, online lender Upstart Holdings said revenues are up 11-fold from a year ago to $194 million.
In the private market, fintech companies are also attracting huge valuations. According to research and analytics firm CB Insights, eight of the top 20 most valuable private technology companies are in the financial services industry.
Earlier this year, payment technology provider Stripe raised its own nine-figure funding round, becoming the most valuable privately held fintech company in the world. Chime’s latest raise lifts its position to the third most valuable behind Swedish “buy-now-pay-later” firm Klarna, valued at $45.6 billion after a financing round in June also led by SoftBank.
Chime is a two-time The Washington City Times Disruptor 50 company that ranked 8th on this year’s list. Sign up for our weekly, original newsletter that goes beyond the annual Disruptor 50 list and provides more insight into startup trends and founders who continue to innovate in every sector of the economy.