One of the most anticipated IPOs of the year occurred on Thursday when neobank Chime raised an impressive $864 million in its initial public offering (IPO). The company priced its shares at $27, exceeding its previously announced price range of $24 to $26. This pricing gave Chime a starting market capitalization of approximately $9.8 billion, significantly below its last private valuation of $25 billion, according to estimates from PitchBook.
Despite the lower valuation, the market responded enthusiastically. Shares opened at $42 and were trading around $14.5 by midday amidst heavy trading activity, as reported by Yahoo Finance. This robust response from retail investors can be attributed to Chime's impressive financial performance. In 2023, Chime reported revenues of $1.3 billion, with projections soaring to $1.7 billion for 2024. Notably, the company's losses shrank significantly from $203 million in 2023 to just $25 million in 2024. Furthermore, Chime achieved profitability in the first quarter of 2025, posting $13 million in net income on revenues of $519 million. However, the company has cautioned that maintaining profitability may be challenging as it continues to invest in growth.
Chime's journey has not been without its challenges. The company faced notable struggles, including layoffs in 2022 and regulatory hurdles in 2021 that prevented it from branding itself as a “bank.” Perhaps the most significant challenge came early in its history when Chime nearly succumbed before even securing a Series B funding round. Co-founder Ryan King recalled the initial years as particularly tough, stating, “We founded the company in 2012, and the first, really, five or six years was very difficult in terms of convincing investors to invest in the idea and the business.”
In 2016, Chime sought to extend its Series A funding, pitching to over 100 investors, all of whom declined. At that point, the company was on the brink of financial collapse. Despite this, King and co-founder and CEO Chris Britt remained committed to their mission of providing a free online banking experience aimed at the working class, generating revenue through interchange fees. Notably, Chime does not charge overdraft fees and offers innovative credit-building tools, including cash-secured credit cards.
The turning point for Chime came when a single seed investor, Lauren Kolodny, then a partner at Aspect Ventures and now a co-founder of Acrew Capital, agreed to invest. Kolodny led Chime’s $9 million funding extension, providing the company its much-needed lifeline. “She really took a bet on Chris and I, and believed in our passion and zeal,” King remarked. Kolodny's support was so significant that Chime invited her to ring the opening bell at Nasdaq, marking a pivotal moment in the company's history.
From that initial investment, Chime went on to raise an estimated $2.65 billion as a private company, attracting attention from renowned venture capitalists like Iconiq. Kolodny’s early investment proved to be incredibly fruitful, with her buying in at 26 cents per share, as disclosed by the company during its private funding rounds. As Chime's valuation soared post-IPO, Kolodny undoubtedly emerged as a significant winner.
A memorable moment from Chime's recent roadshow highlighted the company's connection with its customers. During an investor pitch, a security guard recognized Britt's Chime card and enthusiastically shared, “Checking and savings, baby!” while giving the founders a high five. This encounter illustrates the strong brand loyalty and customer satisfaction that Chime has cultivated over the years.
As Chime embarks on this new chapter following its successful IPO, it stands as a testament to resilience in the face of adversity. With its commitment to providing a user-friendly banking experience, Chime is poised to continue its growth and reshape the future of the neobanking sector.
