Bengaluru — Chime Financial’s shares surged 59% in their hotly anticipated Nasdaq debut on Thursday, valuing the digital bank at $18.4bn and extending a winning streak for new stock market listings.
The San Francisco-based company’s stock opened at $43, compared with the IPO price of $27. It was last trading at $39.90.
If momentum holds in the next few weeks, Chime could reinvigorate confidence among other players in the fintech industry, where valuations have cooled from pandemic-era highs.
“A strong debut could trigger a domino effect, prompting other high-growth firms to accelerate their IPO timelines and position themselves for a window that’s starting to reopen,” said Kat Liu, vice-president at IPOX, which tracks new listings.
“If well-received, Chime could help reopen the IPO window for other long-delayed unicorns [start-up companies with a valuation of more than $1bn].”
Chime and some of its investors, sold 32-million shares at a price above the marketed range to raise $864m in the IPO. The company, which counts Yuri Milner’s DST Global and investment firms General Atlantic and ICONIQ among its backers, was last valued at $25bn after a funding round in August 2021.
It has raised $2.65bn from private investors since its inception, according to PitchBook, a unit of Morningstar that provides private and public market data and financial research data.
Digital banks such as Chime have grown rapidly in recent years by offering cheap, mobile-first financial services that appeal to younger users and underserved consumers.
With features such as no-fee accounts, early access to direct deposits and user-friendly apps, they have positioned themselves as accessible alternatives to traditional banks.
The fintech earns revenue primarily from interchange fees collected when users swipe their debit cards.
“We’re just scratching the surface on this enormous business opportunity we have today,” Chime CEO Chris Britt said.
Britt noted that Chime serves less than 5% of the 200-million Americans who earn $100,000 or less a year, a slice of the market that the company has heavily targeted by spending almost $520m in 2024 on marketing.
“Our goal is to be the number one market share company in terms of primary accounts, recurring direct deposit accounts in that segment, and we’re not going to stop there,” Britt said.
Morgan Stanley, Goldman Sachs and JPMorgan were the lead underwriters for Chime’s IPO.
Market thaw draws hopefuls
Soaring interest rates and recession fears since the 2021 IPO boom have affected valuations and investor demand for new issues, forcing many private companies to delay listing plans. But some high-growth firms are cautiously testing the waters again.
Circle, the stablecoin issuer that went public last week, has seen its stock gain fourfold from its IPO price.
Space tech firm Voyager’s shares more than doubled on their debut on Wednesday.
However, some analysts cautioned against excessive optimism, warning that uncertainty regarding trade negotiations by President Donald Trump’s administration could weigh on the broader recovery.
“While this is clearly a strong IPO window now, there is no guarantee it will continue,” said Samuel Kerr, head of equity capital markets at Mergermarket.
“Investors and issuers have made use of the tariff pause to do deals but there is still broad uncertainty.”
Crypto exchange Gemini, buy-now-pay-later firm Klarna, AI chipmaker Cerebras and medical supplies company Medline are among the most closely watched names in the present IPO pipeline.
Reuters
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