|Power Score: 52.89||Momentum Score: 54.12 (7)||HQ: London, U.K.||CEO: Nikolay Storonsky|
Valuation: $35 billion (+65% vs. last round, 2020)
Amt. Raised: $2.65 billion
Lobbying Spend: No
Industry Orgs: No
Headcount: 1,352 (+76% YoY)
Engineering Headcount: 338 (+100% YoY)
Big Tech Experience: 15.9%
Open Roles: 98
R&D Spending: n/a
Patents Applied For: 0
Patents Owned: 0
Acquisitions: Charlie Finance (August 2021)
Chime is the largest neobank in the U.S. by account holders, according to eMarketer estimates from May 2021, when some 13.1 million U.S. residents held accounts with it. That was more than triple the number of U.S. accounts held by the next-closest competitor, Current. Chime has capitalized on this positioning with a series of mega-funding rounds. In August 2021, it raised $750 million at a $25 billion valuation. Just a year prior, it raised funds at a $14.5 billion valuation. Chime is reportedly positioning itself for an IPO in the first half of 2022, sources familiar with the matter told The Wall Street Journal. Chime CEO Chris Britt told Reuters in a March 2021 interview that Chime has “every intention of being a large, independent public company.” Britt added that Chime would explore all potential paths to going public, including direct listings and SPACs.
Chime’s customer-friendly features — no overdraft fees for up to $200 in debit card purchases, early paycheck access, no monthly account fees and so on — helped it build an early lead in the U.S. market. But the competition has already caught up. Early paycheck access, for instance, has become an increasingly standard feature. Big banks are likewise able to offer accounts without minimum account balance requirements and monthly maintenance fees. And Chime is decidedly a latecomer in launching some of its most recent products — for instance, it added consumer-to-consumer payments in April 2021, some 12 years after Venmo launched (or 22 years after PayPal, for that matter).
Given the size of Chime, it may come as a bit of a surprise that the company still doesn’t hold a charter (see the “What Happens Next” section for further explanation). Chime instead partners with smaller charter-holding banks including Bancorp Inc. and Stride Bank. It has received some regulatory scrutiny around this: Chime reached an agreement with the California Department of Financial Protection and Innovation to stop referring to itself as a “bank” in promotional materials — because, without a charter, it isn’t one. Don’t be surprised if Chime does acquire a charter in the future, as this could allow it to adapt more straightforward marketing while also cutting out fees from middleman banks, particularly interchange fees.
They Said It
“We’re more like a consumer software company than a bank … It’s more a transaction-based, processing-based business model that is highly predictable, highly recurring and highly profitable.” — Chime CEO Chris Britt in a September 2020 interview
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