The IPO saw Chime raise approximately $700 million, with an additional $165 million worth of shares sold by existing investors. The company's stock is slated to commence trading today, Thursday, June 12, under the ticker symbol "CHYM."
This significant public offering follows a prolonged period of inactivity in the fintech IPO pipeline, largely attributed to rising interest rates and valuation adjustments that kept numerous late-stage companies from entering the public market. However, recent activity suggests a shift, with trading platform eToro experiencing a 29% surge in its Nasdaq debut last month, and crypto firm Circle also seeing a positive market reception upon its listing last week. This indicates a renewed investor appetite for technology-driven financial services.
Despite this positive momentum, the path to public markets remains varied for fintechs. Online lender Klarna, for instance, has postponed its IPO plans and recently reported substantial quarterly losses, highlighting the diverse financial health and market readiness among companies in the sector.
Chime's decision to go public, even after a significant reduction from its peak private valuation of $25 billion, represents a crucial test of investor interest in consumer-facing finance companies. Major investors such as SoftBank, Tiger Global, and Sequoia had invested in Chime during its private market zenith in 2021. Prior to the offering, DST Global and Crosslink Capital were Chime's top institutional shareholders, holding 17% and 9.5% of shares, respectively.
Chime's core business model revolves around offering no-fee banking services, debit cards, and early paycheck access, generating the majority of its revenue from interchange fees. The company operates in a competitive landscape, vying with established fintech players like PayPal, Square, and SoFi across various service areas.
In its latest reported quarter, Chime demonstrated robust financial performance, with revenue climbing 32% year-over-year to reach $518.7 million. While net income narrowed slightly to $12.9 million from $15.9 million a year ago, the overall growth trajectory underscores the company's strong market position and ability to attract and retain customers in the digital banking sphere.