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Chime lines up Goldman Sachs for blockbuster IPO -sources

01/21/2022 | 12:42pm EDT

Jan 21 (Reuters) - Digital banking provider Chime Financial Inc has asked Goldman Sachs Group Inc to help it with preparations for an initial public offering in New York, according to people familiar with the matter.

The financial technology startup will likely be valued at a substantial premium to its valuation of $25 billion from an August funding round led by Sequoia Capital, the sources said, adding Chime could aim for a valuation of nearly $40 billion.

Having been valued at $1.5 billion only three years ago, its blockbuster listing would underscore how Chime has managed to take market share from traditional banks thanks to checking accounts that offer payday advances and no overdraft fees.

Chime interviewed investment banks in recent weeks before deciding to give Goldman Sachs a leading role in its listing, the sources said. Other banks will be added to the roster of underwriters in the run-up to its IPO, which could come as early as this spring, the sources added.

The sources, who requested anonymity, cautioned that the timing and size of the offering are subject to market conditions.

Chime and Goldman Sachs declined to comment.

Launched by former Visa Inc executive Chris Britt and Comcast Corp alumnus Ryan King in 2012, Chime offers its services through partnerships with brick-and-mortar banks, including branded checking accounts with user-friendly features such free overdrafts.

It makes money by earning a fee from payment processors such as Visa every time a customer uses a Chime debit or credit card.

If Chime decides to move ahead with its go-public plans, the company may have to brave choppy market conditions, which have caused some IPOs to be pulled in recent weeks and weighed on listings that took place last year.

Robinhood Markets Inc, another popular financial technology startup, has shed more than half its market value since its IPO in July, while shares of Brazilian digital bank Nu Holdings Ltd are down around 15% following its listing in December.

Chime enjoyed robust growth during the pandemic as consumers embraced digital banking services, while the company offered popular products including fee-free overdrafts and faster access to stimulus checks.

The company does not disclose user numbers, but research firm eMarketer estimated in June of last year that Chime would have 13.1 million U.S. account holders by the end of 2021, leading the U.S. digital bank market.

Chime competes with other digital banking services such as Revolut, Current and Varo. (Reporting by Krystal Hu and David French in New York and Anirban Sen in Bengaluru Editing by Matthew Lewis)

© Reuters 2022
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Financials (USD)
Sales 2022 1 524 M - -
Net income 2022 -1 306 M - -
Net cash 2022 4 627 M - -
P/E ratio 2022 -6,35x
Yield 2022 -
Capitalization 8 047 M 8 047 M -
EV / Sales 2022 2,24x
EV / Sales 2023 1,55x
Nbr of Employees 3 900
Free-Float 73,8%
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Robinhood Markets, Inc. Technical Analysis Chart | HOOD | US7707001027 | MarketScreener
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Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 15
Last Close Price 9,23 $
Average target price 13,60 $
Spread / Average Target 47,3%
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Managers and Directors
Vladimir Tenev President, Chief Executive Officer & Director
Jason Warnick Chief Financial Officer
Gretchen Howard Vice President-Operations
Daniel M. Gallagher Chief Legal & Compliance Officer
Robert B. Zoellick Independent Director
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