Chime IPO: Revenue, Users, Valuation & How to Invest

The company began in San Francisco in 2012. Chime is a fintech (financial technology) company that aims to provide banking services that are ‘helpful, easy and free’. To compete with the larger traditional US legacy banks, Chime uses an app to connect customers with regional banks (like The Bancorp Bank and Stride Bank) to provide financial products at lower prices. 

You’ll sometimes see Chime referred to as a ‘neo-bank’ or ‘challenger bank’. Instead of making money through overdraft fees, monthly service fees, service fees, and minimum balance requirements – Chime simply makes money by taking a portion of the transaction fees charged to merchants when you use its debit card.

Currently, the fee-free mobile banking app offers a checking account, savings account, and a credit builder account.

Below is a breakdown of some key figures, including Chime’s revenue, estimated value, and number of account holders.

Source: Forbes; The Information; Sacra

Source: Statista

Source: TechCrunch, Forbes, IG.

Only a few fintech companies are successfully operating as challengers to the current banking system. Here are some of the most notable competitors to Chime:

• Revolut
• Wise
• Stripe
• Ally
• Varo
• Monzo
• N26
• Discover
• Capital One
• Axos

According to Crunchbase, Chime has the backing of some big investors and venture capitalists (VCs), such as:

• Sequoia Capital
• SoftBank
• General Atlantic
• Tiger Global Management
• Dragoneer
• Empede Capital
• Coatue
• DST Global
• Whale Rock Capital Management

In 2020, founder Chris Britt said that Chime would be ‘IPO ready’ in a year. Riding on the wave of interest and investment in fintech companies, Chime saw its valuation grow to $25 billion in 2021. The firm had planned for its IPO to take place in the first half of 2022, aiming for a valuation in the region of $40 billion.

However, inflation, rising interest rates, and a broader change in investing sentiment has led to a sharp reduction in valuations for most fintech companies. It’s likely that Chime’s current valuation is not near the levels of 2021. So, like many other tech companies, Chime will probably hold off on its initial public offering (IPO) until market conditions improve. 

The idea behind an IPO is to raise as much capital as possible to fuel further growth. If Chime carried out its initial public offering under poor conditions and investor sentiment, it wouldn’t be able to reach its full fundraising potential. However, the perfect moment may have already passed. 

Who knows how long Chime will have to wait before technology investments begin attracting the same level of investing interest. It could be the case that Chime has to engage in further rounds of fundraising, or carry out its IPO in less than desirable conditions. 

The latest news regarding the Chime IPO is that it ‘may have put its plans to go public on hold’.

After the Chime IPO date, you can freely buy the newly listed stock. Interactive Brokers and eToro are two top-rated brokers where you can access Chime shares and buy the stock with low fees after the IPO. Take a look at both these brokerage options below:

1# Interactive Brokers

Founded in 1978, the IBKR platform lets you access over 150 market destinations in 33 countries and trade any asset you may be looking for: Stocks, Bonds, ETFs, Forex, Funds, Commodities, Options, Futures, CFDs, Cryptos Futures, and even tiny small companies (a.k.a micro caps).

If you want to buy Chime stock after the IPO, here’s how you can buy shares using Interactive Brokers:

1. Open a trading account with Interactive Brokers.
2. Deposit funds into your account.
3. Once it’s available, search for the Chime stock, there is no confirmed ticker symbol right now.
4. Place the type of order you wish to use (e.g. market, limit, stop etc.).
5. Once you’ve bought your desired number of Chime shares, continue to monitor performance.

If you’d like to learn more about the IBKR platform, check out our full-length Interactive Brokers review.

2# eToro

Founded in 2006 in Israel, eToro now has over 30 million customers worldwide. The platform is widely known for its social and copy trading features. It allows users to trade stocks, forex, commodities, cryptocurrencies, CFDs, and ETFs.

If you’re planning to buy Chime stock after the IPO, here’s how you can buy shares using eToro:

1. Open an account with eToro.
2. Head to the ‘Markets’ page, and select ‘Stocks’.
3. Search for the Chime stock and select ‘Trade’.
4. Next, hit ‘BUY’.
5. Choose how much you want to invest in Chime or the number of shares you want to buy.
6. Select your leverage (or ensure that leverage is set to X1).
7. Decide on a take-profit parameter if you want to automate a future sale of your Chime stock.
8. Finally, hit ‘Open Trade’.

If you’d like to learn more about eToro, check out our in-depth eToro review.

Bottom line on investing in the Chime IPO

Although the Chime IPO (initial public offering) is on hold, the company is still likely to go public at some stage. Chime presents a legitimate alternative to the traditional banking system in the US (without having to explore things like gold and decentralised cryptocurrencies). 

Chime was in a strong position as many investors believed fintech start-ups would soon consume the current financial system. However, a notable shift in the economic environment has seen the valuation of companies like Chime slashed. Chime is trying to create a more inclusive banking system, but this could work for or against them during a downturn. 

Many of Chime’s customers can’t afford traditional banking services or cannot get accepted for a full line of credit with an established bank or credit company. During a recession or a slowing economy, this could mean Chime attracts more users that otherwise wouldn’t have used its accounts. But, with customers in this category, there’s also a greater risk of defaults or low spending (which is how Chime makes money). 

Chime appears to be growing and progressing well, but it may have a tough time weathering the storm over the next few years. That being said, Chime also presents a potential opportunity to get on board with a company that may take away a chunk of market share and customers from existing US banks. If Chime can stay focused, investing early after the IPO might be an opportunity to get in at the ground level in a new fintech-based banking system. 

Let us know in the comments below if you plan on investing in the Chime IPO!