Chime Financial soared more than 35% in its first day of trading Thursday after the company went public at $27 per share, above the expected range of $24 to $26 for the much-anticipated trading debut.
The fintech opened at 43 and closed at 37.11, an increase of 37% above the IPO price. It traded as high as 44.94. The online banking company, which offered 32 million shares, is trading on the Nasdaq under the symbol CHYM.
The offering raised $864 million at a market value of $11.4 billion, according to IPO tracking firm Renaissance Capital. Chime had previously raised funding at a much higher valuation of $25 billion.
Chime Financial runs an app that offers payment and other services, such as payday advances. Its primary users are consumers who make less than $100,000 a year. The average member is 36 years old and is part of a demographic that Chime says is not served well by traditional banks.
The prospectus says Chime has 8.6 million active members, growing 82% since March 2022. The average member makes 54 transactions per month, of which 75% are purchases with Chime-branded debit and credit cards.
The firm — which earns interchange fees from purchases paid by card networks — says 70% of transactions are for essentials such as food and groceries, gasoline and utilities, and 67% of users make Chime their primary financial service.
Chime's average revenue per active member is $251, with a gross margin of 88% and a 67% transaction margin.
Chime IPO Financials
Despite those strong margins, Chime is not profitable. In its prospectus, the company reported losses of $470.3 million in 2022, $203.2 million in 2023 and $25.3 million in 2024. For the quarter ended in March, however, it earned $12.9 million, a 2% year-over-year increase.
Meanwhile, revenue growth has been on a tear, surging 88% last year to $1.673 billion and rising 79% and 83% in 2022 and 2023, respectively.
Chime is not a bank, per se, but uses banking services from The Bancorp Bank and Oklahoma-based Stride Bank. Chime itself is not part of the Federal Deposit Insurance Corp., although its banking partners are FDIC-insured.
"Our digital-first approach has allowed us to reduce the significant expenses associated with bank branches and ATMs," the prospectus reads. Through its bank partners, Chime offers banking products on its app, plus access to locations to withdraw cash and make deposits.
Chime Top Execs' Shares
When the IPO is completed, cofounder, Chair and CEO Christopher Britt will hold about 34.7% of voting shares. Ryan King, another cofounder and a board member, will own about 31.3% of the stock.
Morgan Stanley, Goldman Sachs and JPMorgan are lead underwriters.
Chime's IPO comes about a week after Circle Internet Group soared after it went public. The cryptocurrency payments firm debuted at 31 a share and climbed as much as 138.57. Today, it trades around 117.
But eToro Group, which began trading on May 14, has been wildly volatile. After rising as high as 79.96 Tuesday after its earnings report, shares reversed sharply lower and are back near the IPO price of 52 a share.
