Arab Press

بالشعب و للشعب
Friday, Aug 22, 2025

Digital bank Chime quadruples valuation in less than a year to $5.8 billion as it takes on megabanks

Digital bank Chime quadruples valuation in less than a year to $5.8 billion as it takes on megabanks

Chime, valued at $1.5 billion in March, is now pegged at $5.8 billion just nine months later, according to people with knowledge of the matter. The leading U.S. digital bank raised a record $500 million in a Series E, showing that massive funding rounds are still available for some start-ups.

Chime will use the money to build on its torrid growth, including doubling the company’s headcount by 2020 and potentially acquiring competitors, the people said.

A war is brewing in digital banking, and one leading player just loaded up on ammunition.

Chime, the largest of a new breed of branchless U.S. banks, raised $500 million in a series E round it closed recently valuing the company at $5.8 billion, according to people with knowledge of the situation. That is a remarkable increase from its last round nine months ago, when it raised $200 million at a $1.5 billion valuation.

The move shows that for select start-ups, massive amounts of cash are still readily available, even after investors have grown skittish after Uber and WeWork exposed excesses in private funding markets. The $500 million it raised, led by DST Global, is the biggest single equity investment for a so-called challenger bank, eclipsing the $400 million garnered by Brazilian firm NuBank, according to CB Insights.

Chime CEO Chris Britt plans on using the funds to develop new products and double his employee count by the end of 2020, including a new Chicago office, according to one of the people, who declined to be identified speaking about the bank’s strategy. It will also weigh acquisitions of other fintech firms, this person said.

The San Francisco-based start-up is gearing up for growth just as competition is set to intensify. Apart from other U.S. challenger banks like Varo and Current, seemingly every consumer fintech firm has added a bank account in the past year. On top of that, tech giants including Google and Uber have indicated plans to join the fray, and successful overseas digital banks like Monzo and N26 are coming to the U.S. as well.

But Chime appears to have struck on a winning formula: It targets the disaffected customers of traditional banks with no-fee accounts, free overdrafts and early direct deposits on paychecks. That’s led to torrid growth, going from 1 million accounts last year to about 6.5 million this month.

Still, in the wake of the WeWork debacle, there is greater skepticism of money-burning start-ups with stratospheric valuations, and Chime will have to prove that it can maintain growth with an eye towards profitability. In recent months, funding rounds in Silicon Valley are taking longer to close, and in the case of digital bank Aspiration have stalled, as CNBC reported last month.


20X revenue


Digital banks, which typically rely on a network of fintech providers and FDIC-backed institutions, will also have to show that their systems are robust enough to handle customers’ demands. Chime suffered a service outage in October that led to a surge in customer complaints.

The bank will generate an estimated $300 million in revenue this year, largely from swipe fees on debit cards, meaning its valuation is roughly 20 times revenue, a commonly-used metric for start-ups. Insiders claim that Chime has relatively attractive unit economics – meaning the revenue generated by each customer ultimately exceeds the cost to acquire them – and a reasonable path to profitability. Chime reaches break even on a typical customer in under a year, according to the people.

A key to Chime’s success so far is that users (most of whom are younger and on a tight budget) have to sign up for direct deposit to unlock features like early delivery of paychecks, and that makes it a core part of customers’ financial lives.

The bank is adding roughly 150,000 direct deposit users a month, according to the people with knowledge of the matter. Chime also recently added Mark Troughton, the ex-president of home security start-up Ring that was acquired by Amazon, as chief business officer. Axios reported in October that Chime was in talks to raise money.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
×