San Francisco headquartered fintech ‘Chime’ is set to undertake an IPO, seeking to raise up to $832 million. The transaction, which includes shares offered by existing investors, could result in a fully diluted company valuation of approximately $11 billion. This prospective valuation marks a major reduction from Chime’s peak valuation of $25 billion achieved in a 2021 funding round. Morgan Stanley, Goldman Sachs Group, and JPMorgan Chase & Co. are currently serving as lead underwriters for the IPO, while an additional 11 banks are also involved in the offering.
“Chime®, a leading consumer financial technology company, today announced that it has launched the roadshow for the initial public offering of its 32,000,000 shares of its Class A common stock, 25,900,765 of which are being offered by Chime and 6,099,236 of which are being offered by certain existing stockholders. In addition, Chime intends to grant the underwriters a 30-day option to purchase up to an additional 4,800,000 of its Class A common stock. The initial public offering price is expected to be between $24.00 and $26.00 per share. Chime has applied to list its Class A common stock on the Nasdaq Global Select Market under the ticker symbol CHYM,” the startup announced in an official statement.
According to a filing with the US Securities and Exchange Commission, Chime plans to offer 32 million shares, with 6.1 million shares originating from selling shareholders. The proposed price range per share is set between $24-$26. Should the shares price at the top of this range, Chime’s market capitalization, based on outstanding shares, would be $9.47 billion. The fully diluted valuation, which also incorporates employee stock options and restricted stock units, provides a broader measure of the company’s worth in the public market. The company intends to list its shares on the Nasdaq Global Select Market under the ticker symbol CHYM.
Financially, Chime reported a net income of $12.9 million on revenues of $518.7 million for the three-month period ending March 31. This compares to a net income of $15.9 million generated from $392 million in revenues during the corresponding period a year prior. For the entirety of 2024, Chime’s revenues totaled $1.67 billion, marking a 31% year-over-year increase, while its net loss narrowed to $25.3 million from $203 million in the preceding year.
Speaking of the firm, the 13-year-old Chime currently, offers checking and high-yield savings accounts accessible via a mobile app. The company functions as a fintech provider rather than a chartered bank, relying on banking services supplied by Bancorp Bank and Stride Bank. Its business model primarily derives revenue from interchange fees generated when users make purchases with Chime-branded debit and credit cards, distinguishing it from traditional banks that depend heavily on net interest margins from lending activities. As of March 31, Chime reported 8.6 million active users, representing an 82% increase over the preceding three years. In the year leading up to March 31, the platform facilitated $121 billion in transaction volume. Its product offerings allow customers to access loans ranging from a minimum of Rs 25,000 to a maximum of Rs 10 crore.
The list of Chime’s investors includes affiliates of DST Global, Crosslink Capital, Len Blavatnik’s Access Industries, General Atlantic, Menlo Ventures, Cathay Innovation, and Iconiq. Upon completion of the IPO, co-founders Christopher Britt and Ryan King will retain a majority of the company’s shareholder voting power. The company’s marketing efforts extend to a sponsorship agreement with the NBA’s Dallas Mavericks, featuring its corporate logo on team jerseys.
