Fintech firm Chime valued at US$25b after US$750m funding

[BENGALURU] Chime Financial said on Friday it had raised US$750 million in its latest funding round led by Sequoia Capital Global Equities, valuing the financial services startup at US$25 billion.

Chime's latest fundraise is likely to be a precursor to its stock market listing in the US early next year.

The company had held preliminary talks with investment banks for a stock market floatation that could value it at more than US$30 billion, Reuters reported in March, citing people familiar with the matter.

Other major investors in the Series G round include SoftBank Group Corp's Vision Fund 2, General Atlantic, Tiger Global and Dragoneer Investment Group.

Launched by former Visa executive Chris Britt and Comcast Corp alumnus Ryan King in 2012, Chime makes money by earning a fee from payment processors such as Visa every time a customer uses a Chime debit or credit card.

It provides financial services through partnerships with brick-and-mortar banks, primarily through a Chime-branded checking account with no fees and a Spot Me feature that allows customers to go overdrawn without penalty.

A change in consumer behavior around banking and financial services has benefited fintechs like Chime as they grow more comfortable with digital channels, a trend accelerated by the Covid-19 pandemic.

US digital banks have also caught investor and public interest, highlighted by rising cases of mega funding rounds and public listings.

Chime said it would use the funds raised to scale its operations and launch new products and services.

The company also added Cynt Marshall, Jimmy Dunne and Sue Decker as independent directors to its board.

Ms Marshall is the chief executive officer of American basketball team Dallas Mavericks while Mr Dunne is the vice chairman of investment bank Piper Sandler. Ms Decker is the founder and chief executive officer of community building platform Raftr.

REUTERS