Neobank Chime Now Valued at $25 Billion Following Latest Round
So far in 2021, the FinTech industry has been on a winning streak. Between record-breaking investment rounds, major acquisitions, IPOs, and big announcements, the sector has garnered plenty of attention. Now, Chime is earning FinTech even more headlines following its latest eye-popping funding round and valuation.
As CNBC reports, Chime has announced that it raised a whopping $750 million in its latest funding round. The Series G was led by Sequoia Capital, which has been the most active FinTech investor in the past year and beyond. SoftBank, General Atlantic, Tiger Global, and Dragoneer Investment Group also participated in the megadeal. Impressively, the round now values the company at $25 billion.
Chime is a FinTech banking app that has made a name for itself by offering a slew of consumer-friendly features. These include the ability for customers to receive their payroll funds up to two days early, fee-free overdrafts of up to $200 for eligible users, and more. Additionally, like many neobanks or challenger banks, Chime does not have any monthly fees, minimum balance requirements, or other costs. The startup also partners with The Bancorp Bank and Stride Bank N.A. to provide customers with FDIC insurance on their funds.
According to recent data from eMarketer, Chime is far and away the most popular neobanking app in the United States. This year, the FinTech will have 13.1 million account holders whereas the second most popular service, Current, has approximately 4 million. eMarketer also anticipates that Chime will have 22.7 million users by 2025.
As quickly as Chime’s userbase has grown, so has its valuation. At the time of its $200 million Series D in March 2019, the company’s value was pegged at $1.5 billion. Subsequently, the startup has managed to raise $700 in late 2019 and another $533.8 million last September ahead of their latest round. Turning to the future, there are now expectations that Chime could unveil an initial public offering in the first half of next year.
With the FinTech sector already on course for a record year, Chime’s $750 million round is only pushing that figure higher. However, the company’s massive round and valuation compared to just two years prior highlights the rapid growth that financial services startups — including neobanks and others — are capable of. Furthermore, if Chime were to go public next year, it could prove to be a major test and milestone for the industry. In the meantime, expect Chime’s challenger bank competitors to also be eyeing investments as the digital banking revolution marches forward.