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9
Mar

Chime takes advantage of hot challenger bank appetite with new $200m fundraise

Digital banking platform Chime has raised up to $200m in a new funding round, according to a new US Securities and Exchange Commission filing.

While the filing does not indicate what round the capital has been raised in, it appears to be an extension to its Series E round it closed late last year. The digital bank secured $500m in December which put its valuation at $5.8bn.

The new filing indicates Chime has now raised a total of $700m in funding from 25 accredited investors. Some of the investors include DST Global, ICONIQ Capital and General Atlantic.

It is not clear what Chime’s new valuation will be following the new capital injection.

Chime joined the unicorn club in March 2019 when it raised $200m at a $1.5bn valuation, meaning it managed to triple its valuation in the months leading up to December and the $500m round.

According to a previous report, the digital bank is using the Series E funds to build new products and double the size of its team by the end of 2020. Reports also suggest the company may explore acquiring other FinTech companies.

Chime is a US digital bank which offers customers no hidden fees, access to wages two days early, automatic savings, payment card and other banking tools.

There has been a rise in the use of digital banks, a recent study from Juniper Research claims there will be 3.6 billion digital banking users by the end of 2024 – currently there are 2.4 billion.

A host of digital banking platforms have been setting up in the US to capitalise on the interest in the market. Fellow US challenger bank Empower recently collected $20m in its Series A round to support its growth.

Across the pond into Europe, challenger banks are also reaping in popularity. UK-based Revlout reached a $5.5bn valuation last year after the close of a Series D round, while Germany’s N26 revealed it had reached five million customers and launched into the US, Slovenia and Greece.

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