Exclusive-Chime Aligns with Goldman Sachs for Blockbuster IPO Sources | The mighty 790 KFGO
By Krystal Hu, Anirban Sen and David French
(Reuters) – Digital banking provider Chime Financial Inc has asked Goldman Sachs Group Inc to help it prepare for an initial public offering in New York, according to people familiar with the matter.
The fintech startup will likely be valued at a substantial premium to its $25 billion valuation from an August funding round led by Sequoia Capital, the sources said, adding that Chime could target a valuation of nearly $40 billion.
Valued at $1.5 billion just three years ago, its hit list would highlight how Chime has managed to take market share from traditional banks with checking accounts that offer payday advances and no overdraft fees.
Chime has interviewed investment banks in recent weeks before deciding whether to give Goldman Sachs a lead role in its listing, the sources said. Other banks will be added to the list of underwriters ahead of its IPO, which could come as soon as this spring, the sources added.
The sources, who requested anonymity, warned that the timing and size of the offering are subject to market conditions.
Chime and Goldman Sachs declined to comment.
Started by former Visa Inc executive Chris Britt and Comcast Corp alum Ryan King in 2012, Chime offers its services through partnerships with physical banks, including branded checking accounts with user-friendly features like only free overdrafts.
It makes money by collecting fees from payment processors like Visa each time a customer uses a Chime debit or credit card.
If Chime decides to go ahead with its IPO plans, the company may have to contend with volatile market conditions, which have led to some IPOs being withdrawn in recent weeks and weighing on listings. that took place last year.
Robinhood Markets Inc, another popular fintech startup, has lost more than half of its market value since its IPO in July, while shares of Brazilian digital bank Nu Holdings Ltd have fallen around 15% after its IPO in December.
Chime saw robust growth during the pandemic as consumers embraced digital banking, while the company offered popular products including no-fee overdrafts and faster access to stimulus checks.
The company doesn’t disclose user numbers, but research firm eMarketer estimated in June last year that Chime would have 13.1 million US account holders by the end of 2021, leading the US market. digital banks.
Chime competes with other digital banking services such as Revolut, Current and Varo.
(Reporting by Krystal Hu and David French in New York and Anirban Sen in Bengaluru; Editing by Matthew Lewis)