San Francisco digital bank Chime is in talks to go public at a valuation of $35 to $45 billion, according to a person familiar with the matter, and it’s targeting March of 2022 for the IPO. The company’s revenue will likely reach $900 million to $1 billion this year, the person said. A spokesperson for Chime declined to comment.
Founded in 2013, Chime offers checking accounts with no monthly or overdraft fees and has gained a particularly strong following among lower and middle-income Americans. As hordes of people shifted their spending online during the pandemic, Chime and many large fintechs grew faster than at any point in their history.
That has led to an investor frenzy for fintech startups. U.S. fintechs have raised roughly $43 billion in funding in 2021 so far, more than double last year’s total, according to CB Insights. (Chime raised $1.1 billion at a $25 billion valuation just two months ago.) In the third quarter of 2021, one in every three newly minted unicorn startups was a fintech company. And forty-six fintechs have gone public in 2021, compared with 31 for all of 2020.
At a valuation of $35 billion-plus, Chime would be more valuable than regional banks like Fifth Third, M&T and Regions, each of which has hundreds of branches and brought in more than $1 billion in net profit in 2020. Chime has not been consistently profitable, although CEO Chris Britt has said the company turned a net profit in the second quarter of 2020. “But we are not optimizing for that, because there's great growth opportunity ahead of us,” he told Forbes in March 2021.
Chime provides banking services but doesn’t have a banking license—it partners with Bancorp and Oklahoma-based Stride Bank to offer FDIC-insured checking and savings accounts. It extends small loans of $200 to customers but has yet to roll out a large-scale lending product. Nearly all of Chime’s revenue comes from interchange, the small fees merchants pay every time consumers buy something with a credit or debit card.
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October 23, 2021 at 10:58PM
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Chime In Talks To Go Public At $35 To $45 Billion Valuation - Forbes
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