Mobile banking startup Chime lands $485M mega-round at $14.5B valuation

Chime Financial Inc. today became the most valuable financial technology startup in the U.S. after announcing that it has closed a $485 million round …

Chime Financial Inc. today became the most valuable financial technology startup in the U.S. after announcing that it has closed a $485 million round at a $14.5 billion valuation.

The investment is the third raised by the startup in six months. Chime is now worth about nine times as much as it was in March, when a $200 million round led by DST Global first catapulted it into the unicorn club.

San Francisco-based Chime operates a popular consumer banking service that consumers can access via their mobile devices. The startup offers checking and savings accounts that do away most of the fees traditional banks charge for actions such as ATM withdrawals. Chime also doesn’t require a monthly subscription to use its service.

Instead, the startup generates most of its revenues by charging a small commission on transactions users make with their Chime-branded cards. The startup encourages customers to use their cards more often via an automated savings feature called Save When You Spend. The feature rounds out the value of transactions to the nearest dollar, then adds the round-up differentiate to the user’s Chime savings account.

Though fairly simple, the startup’s spin on online banking has enabled it to stand apart from the numerous other fintech players competing in this niche. Chime claimed to have had 3 million bank accounts when it closed its $200 million round in May and is now adding several hundred thousand new ones every month, Chief Executive Officer Chris Britt (pictured, left, with co-founder Ryan King) told CNBC today.

The extra $485 million in funding could make it easier for the startup to expand into new parts of the financial services market if it so chooses. Revolut Ltd., another mobile banking unicorn that raised capital recently, has built on the popularity of its core checking account features by adding value-added products such as stock trading tools and insurance. With the extra funding, Chime is also better positioned to expand geographically.

The startup is already growing fast enough as it is. In the CNBC interview, Britt said the company has more than tripled its revenue since the start of 2020 and generates positive earnings before interest, taxes, depreciation and amortization. The plan, the executive said, is to make the company “IPO-ready” within the next 12 months.

The $485 million round saw the participation of over half a dozen institutional backers including Iconiq Capital, Tiger Global and General Atlantic. To date, Chime has taken in about $1.5 billion from investors.

Photo: Chime

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Banking Startup Raises $200M, Brings Valuation to $1.5B

… General Atlantic, ICONIQ Capital and Dragoneer Investment Group as well as existing investors Menlo Ventures, Forerunner Ventures and Cathay …

By Darcy Reddan

Law360 (March 5, 2019, 7:06 PM EST) — Digital banking startup Chime said Tuesday that it has raised $200 million in its latest funding round that will be used to accelerate growth and launch new products, bringing the company’s…

Challenger bank Chime triples its valuation to $1.5 billion with $200 million in funding

Existing investors like Menlo Ventures, Forerunner Ventures, and Cathay Innovation also joined in the round. This brings the total funds raised by …

Challenger bank Chime closed a new financing round that trippled the firm’s valuation. It brought in DST Global, the investment firm led by Yuri Milner, as an investor.

Chime said Tuesday it raised $200 million in its Series D financing round led by DST Global, with participation from Coatue, General Atlantic, ICONIQ Capital, and Dragoneer Investment Group. Existing investors like Menlo Ventures, Forerunner Ventures, and Cathay Innovation also joined in the round.

This brings the total funds raised by Chime to $300 million, the firm’s cofounder and CEO Chris Britt told Business Insider.

Chime was valued at $500 million as of its last round back in May, and this new deal represents a tripling of the firm’s worth in a year’s time.

See also: Main Street banks say fintechs like Monzo, N26 and Chime pose the biggest disruptive threat to their businesses — and they’re fighting back

A group of fintechs recently have raised at high valuations, including German challenger bank N26 and the spare-change investment app Acorns.

“There is a trend where, increasingly, financial services will be delivered digitally through your phone, and I think that allows us to offer the no costs services and give people a greater sense of control over the money,” Britt said.

With the new cash, the firm aims to hire new staff, expanding to 200 employees by the end of the year. It’s also looking to explore new short-term lending and credit card offerings, including a credit product that focuses on helping its customers build credit scores.

Read more: Meet the start-up bank with millions of customers trying to disrupt the ‘adversarial’ American banking system

Founded in 2013, Chime currently offers a fee-less digital checking account, enabling customers to deposit and make everyday purchases, and it also operates a peer-to-peer lending system without fees. Customers have opened 3 million bank FIDC-insured accounts on its platform to-date.

Chime got a boost last month when new customers opened 10,000 new accounts in 24 hours in the wake of Wells Fargo’s recent outage,

US mobile bank Chime raises $200 million, valuing its business at $1.5 billion

… Capital and Dragoneer Investment Group, along with existing investors Menlo Ventures, Forerunner Ventures, Cathay Innovation and others.

San Francisco-based mobile banking startup Chime announced this morning it has raised an additional $200 million in Series D financing led by DST Global, valuing its business at $1.5 billion. The oversubscribed round also included participation from new investors Coatue, General Atlantic, ICONIQ Capital and Dragoneer Investment Group, along with existing investors Menlo Ventures, Forerunner Ventures, Cathay Innovation and others.

To date, Chime has raised approximately $300 million, including last year’s $70 million Series C, which then saw the company valued at $500 million.

With the new funding, Chime has now raised the most funding and has the highest valuation among other U.S. challenger banks.

The company is now one of several going after a younger, millennial audience who no longer sees the need for banks with physical branches, and who are sick of being nickel-and-dimed by bigger banks’ numerous fees. Like others in this space, Chime offers a “no fees” bank account, which won’t penalize users for things like dropping below a minimum balance or even overdrafts.

On top of this is a modern-day banking app with features that make it look like it was actually built by a technology company — not a traditional bank. That’s because its team’s background is a mix of both tech and finance. Chime’s co-founder and CEO Chris Britt previously worked at Flycast, was an early comScore employee and worked at Visa and Green Dot; co-founder and CTO Ryan King spent time at Plaxo and Comcast before Chime.

Chime also includes a couple of innovative features that help differentiate it from the other mobile banking apps on the market. This includes an automatic savings feature that rounds up purchases to pocket the change; another feature that automatically saves 10 percent of your paycheck into Chime’s savings account; and one that offers a no-fee paycheck advance that makes your money available sooner.

To date, customers have opened more than 3 million FDIC-insured bank accounts on Chime, which makes it the largest brand in its category, the company claims. (This appears to be true. SoFi had 500,000 members as of last year. Simple doesn’t disclose its account base beyond “hundreds of thousands.” Moven and Varo Money are smaller, according to American Banker’s round-up.)

Its size, scale and growth trajectory, perhaps, have aided Chime in poaching a few execs from its other fintech businesses — including rivals. For example, the company recently added Chime VP, Risk Brian Mullins, who was the former head of Risk Ops at Square; and Chime GM, Lending Aaron Plante, who was the former Business Unit leader for Student Loans at SoFi.

The company says it plans to use the new investment to continue to accelerate growth and launch new products, including those in lending and credit. It also plans to double its San Francisco-based team to more than 200 employees and expand its leadership.

“We’re excited to welcome some of the world’s leading growth investors to Chime,” said Britt in a statement about the funding. “Banking should be free, helpful and easy to use but traditional banks are reluctant to embrace this reality. We aim to set a new standard in the industry by using technology to create services that are truly aligned with the best interests of consumers.”