Chime, the challenger bank based in the U.S., now has a valuation of $1.5 billion after raising $200 million in venture funding.
According to a report in CNBC, the San Francisco startup said the Series D round of venture funding was led by DST Global, as well as new investors Coatue, General Atlantic, ICONIQ Capital and Dragoneer Investment Group. Other existing investors participating in the fundraising round include Menlo Ventures, Forerunner Ventures and Cathay Innovation.
Chime said proceeds from the funding will go toward growing the business and launching additional lending and credit products. The company also plans to double its size to more than 200 employees and expand its leadership team. Chime noted in its press release that it began March with more than three million FDIC bank accounts.
“We’re excited to welcome some of the world’s leading growth investors to Chime,” said Founder and CEO Chris Britt in the release announcing the capital raise. “Banking should be free, helpful and easy to use, but traditional banks are reluctant to embrace this reality. We aim to set a new standard in the industry by using technology to create services that are truly aligned with the best interests of consumers.”
Chime launched in 2013, offering debit cards, savings accounts and checking accounts to consumers without any fees. The startup makes its money by receiving a portion of interchange fees from debit cards. Last month, Bloomberg reported Chime was in talks to raise $300 million at a $1.5 billion valuation, with DST leading the round. The company raised $500 million in May, with Menlo Ventures leading that round.
Chime isn’t the only challenger bank to raise capital in recent months. Rivals Revolut and N26 recently raised hundreds of millions of dollars, but at higher valuations. In late April, Revolut raised $250 million, giving it a valuation of $1.7 billion, while N26 raised $300 million in January, giving it a $2.7 billion valuation.