Wednesday night (June 11), we got a glimpse into the interest in FinTechs coming to market, and in this case, the appeal of digital-only banking.
Chime will debut on the Nasdaq exchange with the ticker CHYM.
As had been reported, with a range of $24 to $26 and 32 million shares offered, the valuation would have been roughly $11 billion. Within that 32 million share count, Chime is offering 25.9 million; current shareholders are offering the remainder.
As is common practice with new listings, and as detailed in the S-1 filed with the Securities and Exchange Commission last month, and an amended filing, there’s also the option for the underwriters — banks including Goldman Sachs, Barclays, JPMorgan and others — to buy an added 4.8 million shares of Class A common shares.
After the Offering
After the offering, there will be 332 million Class A shares outstanding. In the amended filing, Chime noted, “We estimate that the net proceeds to us from our sale of shares of our Class A common stock in this offering will be approximately $599.7 million (or approximately $713.4 million if the underwriters’ option to purchase additional shares of our Class A common stock from us is exercised in full), based upon the assumed initial public offering price of $25.00 per share.”
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Wednesday’s pricing action suggests the haul will be a bit more than the initial marketing had indicated. As of late Wednesday, the company priced the IPO at $27 a share, which means the firm is garnering $864 million, and the valuation stands at about $11.6 billion.
The secondary market could see even more positive momentum, if recent FinTech related action can be used as any indication. As PYMNTS has chronicled, Circle went public last week and notched a stellar 168% gain on its first day of trading, having priced the night before the offering at $31, above the expected range and then rocketing to more than $83.
The Details
In parsing the S-1, we reported last month that Chime has estimated that its serviceable addressable market offers up to an $86 billion annual revenue opportunity. That market potential has been calculated by multiplying the average revenues derived from “highly engaged” members of $442 by 196 million individuals earning up to $100,000 annually. That revenue opportunity can grow to an annualized pace of $426 billion by targeting consumers who earn up to $200,000 yearly, according to details in the filing.
The company said in the filing that it has 8.6 million active members — up 23% from 2024 — where 67% of them use Chime as their primary financial provider. Customers used Chime for 54 transactions per month, on average.
S-1 filings also detail risk, and Chime disclosed, “We earn the substantial majority of our revenue through interchange-based fees from debit and credit card transactions.” The company generated $1.3 billion in payments revenue, up 25% from 2023’s levels, accounting for 76% of the consolidated top line. Platform-related revenues were the remaining $397 million, through FDIC-insured deposit accounts, checking accounts and other mobile banking offerings.
Thursday, the bell will chime, Chime will list, and yet another FinTech will find its common shares changing hands at a furious pace.
