Chime, the nation’s largest digital-only bank, founded by CEO Chris Britt, is on the brink of a possible 2025 IPO, with potential valuation of around $8 billion. With a mission to serve low and middle-income consumers, Chime has seven million customers using its cards for $8 billion a month in transactions. Despite its size, the company is still working towards consistent profitability, recently becoming profitable in the first quarter of 2024.
Britt, a product of a working-class background in New York, has remained committed to serving the less affluent throughout Chime’s 12-year journey. The company has faced challenges and missteps along the way, including a slow start and a spike in fraud as it grew rapidly. However, Chime has also introduced innovative features such as early access to direct-deposited paychecks and a savings account, attracting new customers and reducing customer acquisition costs.
Chime’s revenue grew by 30% in 2023, reaching $1.3 billion, with a gross profit exceeding $1 billion. The company raised $750 million at a $25 billion valuation in 2021, bringing total funds raised to $2.3 billion. To achieve long-term profitability, Chime is expanding its product line to include lending options, retirement accounts, and ETFs. It aims to broaden its customer base to include individuals earning up to $100,000 annually.
Despite its success, Chime faces challenges from regulatory uncertainties and potential competition from traditional banks. The Biden Administration and Treasury Secretary Janet Yellen have hinted at regulatory crackdowns on nonbanks, while big banks may start adopting customer-friendly features pioneered by Chime. Britt understands these risks and has been engaging with lawmakers in Washington to protect Chime’s business model.
As Chime prepares for potential IPO and future growth, Britt and his team are focused on building a sustainable and profitable business serving low and middle-income consumers. With a strong commitment to its mission and a track record of resilience and innovation, Chime is poised to continue its expansion and solidify its position as a leader in the digital banking space.
