The IPOX® Watch - IPO Analysis: Chime (CHYM US)
COMPANY DESCRIPTION
Founded in 2012, Chime Financials, Inc. is a San Francisco-based fintech company that partners with The Bankcorp Bank, N.A and Stride Bank, N.A to offer FDIC-insured banking services with no fees and competitive interest rates. Although not a traditional bank, Chime operates an asset-light model by leveraging its partners’ infrastructure, avoiding branch overhead and regulatory burdens. Recognized as a top brand in neobanking by Time Magazine in 2024, Chime ranked amount the top 3 U.S banking platforms in a Statista survey of over 10,000 customers. In Statista’s survey, 9% of banking customers use Chime as their primary bank account. Its active user base grew from 5.3 million in 2022 to 8.6 million by Q1 2025
RISKS
With Chime’s dependence on partnered banks, if a bank’s total assets increased to $10 billion, it may be limited by the Durbin Amendment and incur losses. Additionally, if partners have solvency issues or any financial instability, substantial losses and costs to find a new partner can occur.
BUSINESS MODEL
Chime Financial, Inc. primarily generates revenue from members using Chime-branded debit and credit cards, accounting for 72% of revenue as of Q1 2025. The remaining 28% is generated from platform-related services, including ATM fees, instant transfers, high-yield savings, referrals, SpotMe tips, and cash deposit fees. At the end of Q1 2025, Chime reported $520 million in revenue, a 32% increase from Q1 2024, and is on track to reach over $2 billion by year-end according to our analyst’s projection.
IPO
Prior to going public, Chime Financials Inc. was valued at $24.93 billion according to Forge Global in 2021. On May 13, 2025, Chime Financials, Inc. filed for an IPO on the NYSE. Officially issuing 32,000,000 Class A common stock at $27, Chime had a market capitalization of just below $9.84 billion and a percentage of equity at 8.78% before green shoe options on June 12, 2025. This revised valuation reflected the broader market correction in fintech valuations since the peak in 2021 and a more conservative public market sentiment towards profitability. No dividend options are anticipated at this time. As of June 23, 2025, Chime is at an estimated market capitalization of $10.69 billion. Proceeds from IPO will be used to increase capitalization and financial flexibility where working capital, operating expenses, and other general costs can be minimized. As for investments, Chime does not have any planned material acquisitions but does plan to invest towards its products, services, or technology.
INNOVATIONS
In terms of innovation, Chime has launched its 2024 proprietary payment processor and ledger, ChimeCore. ChimeCore acts as a facilitator for transactions between parties such as payments, transfers, or other financial transactions. Additionally, Chime has implemented their AI chatbot partnered with Simility AI which is owned by PayPal.
