US challenger bank Chime has reportedly become one of the world highest valued FinTech companies after reaching a staggering $14.5bn valuation.
The FinTech managed to reach the status of a decacorn after it closed a $485m Series F round, according to a report from CNBC.
What makes this feat even more impressive than it already is, is the sheer speed it has managed to achieve it. Chime has more than doubled its valuation within just nine months, with the company being valued at $5.8bn in December 2019.
The company only reached the unicorn status 18 months ago, when it was valued at $1.5bn, meaning it has grown by around 900% in a year and a half.
Chime has now become the US largest consumer-focused FinTech company. Despite this, it is still a long way behind the country largest FinTech, which it Stripe and its colossal $35bn valuation.
The rapid growth of Chime looks to represent the strong growth of its platform, which has seen it triple its transaction volume and revenue this year, the CNBC article said.
Chime CEO Chris Britt told CNBC, ?Nobody wants to go into bank branches, nobody wants to touch cash anymore, and people are increasingly comfortable living their lives through their phones. We have a website, but people dont really use it. Were a mobile app, and that how we deliver our services.p>
The coronavirus pandemic has put greater emphasis on the digital world, with people moving to cashless interactions and online banking services. The article claims the FinTech reached profitability on an EBITDA basis during the lockdown and is adding thousands of new accounts each month.
It is not all easy pickings for challenger banks, however. UK-based Monzo has shown that it is not easy to maintain growth through this troubled time, after it suffered a 40% down round in June. Its valuation dropped from $2bn to $1.24bn.
Chime domination of the US market might make it hard for other FinTechs looking to capture a segment of the market. This year has seen a handful of new challenger banks to raise funds. Empower closed a $20m Series A to foster its growth, as did NorthOne with its $21m funding round.
The market also saw One close a $17m Series A round as it gears up for a public launch later in the year.
It is not just local competition Chime is fighting off, with many European challenger banks, including Monzo, Revlout and N26 all attempting to make it big in the US. However, research from Apptopia claimed that Chime still represents around 60% of all digital banking users in the country.
The company CEO Britt told CNBC that Chime will be IPO-ready in 12 months time.
This is not the only US FinTech to become a decacorn this year. Retail investment platform Robinhood recently hit an $11.2bn valuation after the close of a $200m Series G round.
Moving across the Atlantic and into Europe, earlier this month saw Swedish payments company Klarna hit a $10.2bn valuation, making it the biggest FinTech on the continent.
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