Chime (company)

Chime is an American technology neobank company which provides fee-free financial services through a mobile app.[2]

Chime
Private
IndustryFinancial Services
Founded2013 (2013)
FoundersChris Britt
Ryan King
HeadquartersSan Francisco, California, United States
ProductsChecking accounts, savings accounts, debit cards, p2p, fee-free overdraft
Revenue US$200 million (2019)[1]
Total assets US$5.8 billion (2019)[1]
Number of employees
500-1,000
Websitechime.com

History

Chime was founded by Chris Britt (CEO) and Ryan King (CTO) in 2013 in San Francisco, California as an alternative to traditional banking. The company launched publicly on April 15, 2014 on the Dr. Phil Show.[3]

FDIC

Chime bank accounts are insured up to the standard maximum deposit insurance amount of $250,000 through its partners, The Bancorp Bank or Central National Bank, which rebranded itself as Stride Bank, N.A. in 2019[4][5][6], Members FDIC. Accounts are also owned and managed by either The Bancorp Bank or Stride Bank.

Response to the COVID-19 Pandemic
  • In April 2020, in response to the financial strain of COVID-19 Chime announced a pilot program to provide users who e-filed tax returns with the IRS a $1,200 advance on the Economic Stimulus Payment via SpotMe, Chime's fee-free overdraft product, after talks with Mark Cuban. [7]
  • On April 10th 2020, Chime announced the successful processing of over $375,000,000 in stimulus payments 1 week ahead of the scheduled government disbursement date. [8]

Partnerships + Acquisitions
  • In Q3 2018 Tech Crunch reported that Chime had made its first acquisition for Pinch, a startup focused on helping millennials and young adults build their credit scores by reporting on-time rent payments to credit bureaus. Pinch's co-founders joined Chime's team as a part of the acquisition. [9]
  • In January 2020, Chime announced a partnership with the Dallas Mavericks as their jersey sponsor as a part of a multi-year deal. [10]
  • Chime CEO Chris Britt, Mavs owner Mark Cuban, and Mavs CEO Cynthia Marshall discussed the partnership at a press conference on January 17th. Mark Cuban is also an investor in dave.com, a Chime SpotMe competitor, which provides fee-free overdraft services.

Business Model

In contrast with traditional consumer firms, Chime has no physical branches and does not charge monthly or overdraft fees. Account-holders are issued Visa debit cards and have access to an online banking system accessible through chime.com or via the mobile app for Android or iOS.

Chime earns the majority of its revenue from the collection of interchange.[11] Interchange is the fee that banks charge to the merchant who processes a credit card or debit card payment in order to cover the costs associated with the authorisation and processing of card transactions. An interchange based revenue model means that profitability is contingent on successfully incentivizing customers to regularly make card purchase transactions.

Growth + Development

Account growth
  • In May 2018, Chime reached one million accounts mark.
  • As of December 2019, the company had 6.5 million accounts.[2]
  • Feb 2020 Business Insider reported "Chime has hit 8 million account mark." [12]

Product Suite

According to Business Insider, "Chime offers a core suite of fee-free products, including a checking account with no minimum balance, an automated savings feature, and early wage access."[13]

  • In September 2019, Chime launched SpotMe, a fee-free overdraft service as an alternative to the traditional $35 overdraft fee charge levied by traditional American Banks. Customers can overdraw their accounts up to -$100 without incurring an overdraft fee; once the overdraft limit is reached, purchases will be declined but no traditional negative balance fees charged.[14]
  • Chime CEO Chris Britt stated that Chime plans to launch a fee-free credit card in early 2020 that aims to help customers build credit. The credit card product is in beta testing as of January 2020.[15]

Funding Rounds
  • Series A: Crosslink Capital and Aspect Ventures both led Series A rounds for $9M (May, 2016) and $8M (Nov, 2014) respectively
  • Series B: Chime raised an $18 million Series B in September 2017. Cathay Innovation led the round with participation from Northwestern Mutual Future Ventures, Crosslink Capital, Forerunner Ventures, Homebrew and others.[16]
  • Series C: Menlo Ventures led Chime's $70 million Series C round in May 2018.
  • Series D: In March 2019, Chime raised US$200 million which brought their valuation to US$1.5 billion and Unicorn status.[17]
  • Series E: CNBC first broke the news that Chime had secured its series E funding round in December 2019 of $500 million at a valuation of $5.8 billion.[18] According to Crunchbase, Chime has raised $808.8 million to date.[19]

Growing Pains
  • On October 16, 2019, Chime experienced a service outage leaving users without access to their deposits. The issue was resolved the next day. [20]
gollark: ```phpfalse false true false false```
gollark: ++remind 1d Finish SCP-6052
gollark: Excellent.
gollark: ```phptest```
gollark: ++supported_langs echo

See also

References
  1. Fuscaldo, Donna. "Digital Bank Chime Now Has a Valuation of $5.8 Billion". Forbes.
  2. Fuscaldo, Donna. "Digital Bank Chime Now Has A Valuation Of $5.8 Billion". Forbes. Retrieved 2019-12-08.
  3. McGraw, Phil (April 15, 2014). "Dr. Phil Surprises a Guest Preparing for a New Baby". YouTube.
  4. "Home". stridebank.com. Retrieved 2020-07-29.
  5. "Home". stridebank.com. Retrieved 2020-07-29.
  6. "What type of account is my Chime account?". Chime Banking - Help Center. Retrieved 2020-07-29.
  7. Son, Hugh (April 2, 2020). "Chime pilots way to get $1,200 stimulus checks to users instantly after talks with Mark Cuban". CNBC.
  8. "#ChimeCARES Update: Initial stimulus payments have been received. More on the way. | Chime". Banking Made Awesome. April 10, 2020.
  9. "Mobile bank Chime picks up credit score improvement service Pinch in all-stock deal".
  10. Rader, Doyle. "Dallas Mavericks Announce Multi-Year Partnership With Chime As Jersey Sponsor". Forbes.
  11. "Online bank Chime is said to near funding at $1.5 billion value". American Banker. Retrieved 2019-12-08.
  12. Magana, Gregory. "Chime has hit 8 million accounts and is now offering a 1.6% interest rate on savings products". Business Insider.
  13. Green, Rachel. "Chime's recent earnings marks the largest single equity investment in a neobank". Business Insider.
  14. "Chime now has 5 million customers and introduces overdraft alternative".
  15. Kauflin, Jeff. "Digital Bank Chime Will Quadruple Its Revenue In 2019, Reeling In Direct Deposits". Forbes.
  16. "Chime raises $18 million for mobile banking without the fees". TechCrunch. Retrieved 2019-12-08.
  17. Mascarenhas, Natasha (March 5, 2019). "Bank Startup Chime Secures $200M". Crunchbase News.
  18. Son, Hugh (2019-12-05). "Digital bank Chime quadruples valuation in less than a year to $5.8 billion as it takes on megabanks". CNBC. Retrieved 2019-12-08.
  19. "Funding Rounds". Crunchbase. Retrieved 2019-12-08.
  20. Son, Hugh; Rooney, Kate (October 17, 2019). "Mobile bank Chime goes dark for millions of customers as it seeks $5 billion valuation". CNBC.
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