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Chime Financial will seek to raise up to $832mn in an initial public offering this month, giving the US mobile banking group an $11.2bn valuation that is sharply reduced from four years ago.
The San Francisco-based fintech, which is slated to list on the Nasdaq on June 12 under the ticker CHYM, will sell 32mn shares at a range of between $24 and $26 per share, according to a filing on Monday with the Securities and Exchange Commission. About 6mn of the shares will be sold by a small number of Chime’s early investors.
Chime was valued at $25bn in 2021. The steep decline in its appraisal underscores how far equity valuations have dropped from optimistic heights in recent years as investor confidence in many tech companies has been shaken. Chime initially filed its intention to float late last year and delayed its efforts as Donald Trump announced so-called “reciprocal” tariffs in early April.
The IPO market has begun to thaw in recent weeks on hope that the worst of the US president’s tariff threats has passed. US stocks have rebounded from their early April lows and in May enjoyed their best month since late 2023.
Chime was launched by Chris Britt, chief executive and chair, and Ryan King, a director, in 2014 on the American TV show Dr Phil. The talk show host’s son, Jay McGraw, owns just over 1 per cent of the start-up’s shares and will sell a small number during the IPO, according to filings.
Chime offers no-fee banking services for Americans earning fewer than $100,000, a market the company views as underserved by traditional banks. Though not a bank itself, Chime offers checking accounts and person-to-person money transfers through two banking partners, The Bancorp Bank and Stride Bank.
An arm of global VC group Cathay Capital, which owns about 5 per cent of Chime, plans to sell roughly 20 per cent of its stake, alongside smaller sales by McGraw, a subsidiary of Northwestern Mutual Life Insurance Co and a venture capital group with ties to eBay founder Pierre M Omidyar, according to an SEC filing.
Chime’s most recent venture capital fundraising was in 2021 during a frothy period for tech start-ups. It raised $750mn from investors led by Sequoia Capital at a valuation of $25bn. But rising interest rates and economic uncertainty have tempered expectations. Last year, about a quarter of fundraising rounds were at flat or lower valuations, according to PitchBook.
Some recent debuts have fared better as equity markets have rebounded from April’s trade war scare.
Israeli trading platform eToro had postponed its IPO until last month and now trades at about $60 per share — up nearly 15 per cent from its initial price of $52 per share. AI data centre provider CoreWeave had to cut the size of its late March IPO, but it has enjoyed a nearly 200 per cent share price increase since then.
Klarna’s long-awaited IPO remains in the wings after months of delay by the Swedish “buy now, pay later” lender. But other companies showed interest in testing the market on Monday, including space and defence company Voyager Technologies’ filing to list on the New York Stock Exchange, and stablecoin operator Circle Internet’s effort to boost the size of its previously announced IPO.
