Digital banking startup Chime pops with IPO debut, raising $700 million at a valuation of $11.6 billion

Chime opened strongly on the Nasdaq on Thursday, priced the stock at $27 before reaching $43. The digital banking startup raised about $700 million in IPOs, with early supporters winning an additional $165 million. The stocks are traded under the ticker symbol chim.

The IPO sets Chime valuation at $11.6 billion. This is when companies like Sequoia poured cash into high-growth fintech bets at the 2021 private market peak than half the $25 billion price tag. But in today’s reset environment, the number remains open to chimes among the most valuable consumer fintech companies for years.

Chime’s Offering is the latest in the small but growing waves of Fintech IPO. Etoro and Circle recently made headlines with their own powerful debut, indicating that investors’ desire for public fintech stocks could have been thawing on ice for years.

The IPO arrives as national market activities are once again showing signs of life. After the volatility of April, investors’ appetite appears to be returning, and was helped by a milder stock market. The US IPO window, which was temporarily closed due to tariff-related uncertainty, has a crack open.

In the most recent quarter, Chime recorded revenue of $518.7 million, up 32% from the previous year. Profit was $12.9 million, a slight decline from $15.9 million the previous year.

CEO Chris Britt said Chime’s growth stems from sticking to one audience. “Two-thirds of our customer base use us as our direct deposit account and our primary account relationship,” Britt told CNBC. “We help our members avoid fees, access short-term liquidity, build credits, and build savings.”

Founded in 2013 by Britt and co-founder Ryan King, Chime created the name in an unpaid bank. The app offers checks, savings and debit cards, and earns revenue primarily from swiping fees whenever a customer uses the card. The company does not charge overdrafts or maintenance fees, in stark contrast to traditional banks.

The road to the IPO was not smooth due to the chimes. The company faced layoffs in 2022 and encountered trouble with regulators in 2021, banning itself from calling it a “bank.” But the toughest chapter came even earlier before Series B when the startups almost died. Britt said more than 100 investors took over the chime before they finally gained traction.

The final private round was 2021, with Chime raising $750 million at a $25 billion valuation. It’s a long way from today’s public pricing, but the downshift could have been strategic. In a market that is still cautious with Fintech, a more-based valuation will help you win the right investors for your door.

Britt said Chime had reached $25 million adjusted profitability in the last quarter, improving its margin by 40 points over the two years.

Major shareholders include DST Global, Crosslink Capital, and Iconiq. “We continued our investment throughout the subsequent rounds as we have a specific and unwavering focus on serving Americans every day,” said Yoonkee Sull, general partner at Iconiq.

Usage backs it up. The average chime customer completes 55 or more transactions a month and checks the app 4-5 times a day. Monthly active users increased by 8.6 million in the first quarter, up 23% from the previous year.

But growth has been sacrificed. Chime spent $1.4 billion on marketing from 2022 to 2024. Britt said retention is still strong, especially when more than 90% are stuck when users set up direct deposits.

“Sometimes, it takes a life change – a new job, a career change – for someone to switch their primary account,” Britt said.

According to Britt, the majority of Chime’s revenue is 72%. Its simplicity surprises some analysts. “I’m actually amazed at how unsophisticated the business model is,” says Mizho analyst Dan Dolev.

Still, the open market makes a decision. If the chime holds up well, you can open the door for others like Klarna, Gemini, and Bullish.

“If that works out, you know that in two or three months, others will continue,” said David Golden, a partner at Revolution Ventures and former head of high-tech investment banking at JPMorgan. “If not, they will stay on the sidelines.”