US neobank Chime quadruples valuation to $5.8b, raises $500m Series E
US challenger bank Chime has managed to quadruple its valuation in less than a year to $5.8 billion from $1.5 billion, according to CNBC sources “with knowledge of the matter”.
The new valuation follows a notably huge $500 million Series E funding round led by DST Global, which marks the largest individual equity investment for a challenger bank ahead of Brazilian challenger NuBank’s $400 million fundraise in July of this year, according to CB Insights.
Chris Britt, Chime CEO
DST Global led Chime’s $200 million March 2019 funding round too, which saw the challenger bank hit its $1.5 billion valuation.
Investments are only getting larger and more frequent for fintech start-ups. Fellow US fintech Robinhood, a digital trading app, hit a similarly large $7.6 billion valuation in July after a $323 million Series E funding round.
Read more: US challenger Chime goes down for millions of customers
Chime CEO Chris Britt plans on using the funds to develop new products, double his employee count by the end of 2020, and set up a new Chicago office. Acquisitions of other fintech firms are also being weighed up according to the sources.
The new capital injection comes at a time when European challengers such as N26, which raised $300 million at the beginning of this year and a further $170 million in July, and Monzo are edging into the US market fast. This month Monzo hired a Visa executive to further speed up its US expansion.
Nonetheless Chime has a significant, growing share of the US market. With 6.5 million customers now, up from 1 million last year, the challenger says it attracts 150,000 direct deposit users a month on average.
