Exclusive: Chime prepares for stock exchange listing as online banking grows – sources

(Reuters) – Chime has had preliminary talks with investment banks about launching an IPO, which could value the financial services startup at more than $ 30 billion, by the end of 2021, told Reuters from people familiar with the matter.

Since its launch in 2012, Chime has grown into one of the fastest growing fintech platforms in the United States. It briefly overtook online brokerage Robinhood Markets last year as America’s most valuable fintech ‘unicorn’.

San Francisco-based Chime CEO Chris Britt said in September he wanted to be ready for an Initial Public Offering (IPO) within the next 12 months.

Preparations have now started in an attempt to capitalize on a boom that has seen more people banking online during the COVID-19 pandemic, the sources said on Tuesday.

Chime, which was valued at $ 14.5 billion in a private fundraiser in September, has raised more than $ 1.5 billion in capital and has more than $ 1 billion in cash.

Britt said in an interview this month that he doesn’t need to raise additional capital anytime soon. He declined to comment on the IPO plans, but said Chime was evaluating all options.

“As we get closer to the decision to go public, we will assess all potential avenues to do so, including direct, traditional (IPO) and PSPC listings.”

A Special Purpose Acquisition Company (SPAC) is a blank check company seeking to merge with a private entity in a type of transaction that has become very common over the past year.

Britt added that Chime “has every intention of being a large independent public company” but has not set a timeline.

A spokeswoman for Chime declined to comment on discussions with the banks.

ATM SHOWERS

Founded by former Visa executive Britt and Comcast Corp alumnus Ryan King, Chime makes money by collecting fees from payment processors such as Visa every time a customer uses a Chime debit card. He also launched a credit card.

It provides financial services through partnerships with traditional banks, primarily through a no-fee Chime branded checking account and a “Spot Me” feature that allows clients to be overdrawn without penalty.

Chime has partnered with banks such as The Bancorp Bank and Stride Bank, through which it routes deposits to accounts receivable, and Britt said it has benefited from increased consumer confidence in using the platforms. digital during the pandemic.

While declining to disclose the number of Chime users, the company spokesperson said that an average person spent 33% more last year through Chime than in 2019.

“People don’t really want to touch ATMs anymore. People don’t want to have as much cash as they used to. And people are more and more comfortable paying for things through apps, managing their accounts through apps, ”said Britt.

Chime has also attracted customers by offering Americans early access to their stimulus checks, part of what Britt called an “obsession” with supporting customers through tough times.

In the past three stimulus rounds, Chime has funneled more than $ 6 billion in stimulus funds, including $ 3.5 billion to more than one million customers in the last cycle, the spokesperson said. .