Chime, the financial technology company on Wednesday announced that it has raised $864 million in its initial public offering (IPO). Chime priced its IPO at $27 per share. Chime had marketed the offering between $24 and $26 per share. The IPO priced of Chime at $27 per share was way above the expected range, in an offering that values the company at $11.6 billion on a fully diluted basis.
(Image Credit: chime)Chime Fintech IPO price announcement
Chime’s IPO is one of the biggest by a U.S. financial technology firm in recent years. Chime, the provider of online banking services company raised roughly $700 million in the IPO, and another $165 million worth of shares that were sold by existing investors.
Chime IPO ticker
Chime stock is expected to begin trading on Thursday under ticker symbol CHYM.
Freeze in Fintech IPO pipeline
There has been a years-long freeze in the fintech IPO pipeline. This was mainly due to rising interest rates and valuation resets that kept many late-stage companies on the sidelines. Finally, the market has loosen a bit. Last month, the trading platform eToro jumped 29% in its Nasdaq debut. Crypto company Circle IPO popped after hitting the market last week.
The recent pickup in listings has encouraged more companies to revive plans, with June shaping up as a key window as firms look to capitalize on relatively stable market conditions ahead of the traditional summer slowdown.
Meanwhile, Klarna, the online lender has delayed its IPO plans.
Chime’s IPO debut
Chime’s decision to go public marks a major test of investor appetite for consumer-facing finance companies. This was after a steep cut from its last private valuation of $25 billion. SoftBank, Tiger Global, and Sequoia all invested in the 2021 round at Chime’s private market peak.
Major institutional shareholders for Chime are DST Global and Crosslink Capital; they owe 17% and 9.5%, respectively, of shares before the offering.
After the IPO offering by Chime
There will be 332 million Class A shares outstanding after the offering by Chime. 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.”
Chime’s revenue
Chime draws most of its revenue from interchange fees. Chime competes in various areas with fintech incumbents PayPal, Square and SoFi. Its revenue climbed 32% in the latest quarter from a year earlier to $518.7 million. The company’s net income narrowed to $12.9 million from $15.9 million a year ago.
Morgan Stanley, Goldman Sachs and JPMorgan Chase are the lead underwriters for the IPO offering.
