- Chime, a neobank, raised $864 million in its IPO on Thursday, pricing shares at $27 each, above the projected range of $24 to $26.
- Despite being lower than its private valuation of $25 billion, Chime’s stock closed at $37, bringing its market cap to roughly $12 billion, fueled by positive response from retail investors.
- Chime reported $1.3 billion in revenue in 2023, increasing to $1.7 billion in 2024, with losses narrowing from $203 million to $25 million, and achieved profitability in Q1 2025.
- Founded in 2012, Chime faced significant challenges in 2016, struggling to secure Series A funding extension, with over 100 investors turning them down.
“We were almost out of money,” King said.
- The turning point came when Lauren Kolodny, then a partner at Aspect Ventures, decided to invest, validating the founders’ vision and providing necessary funds.
- Kolodny’s early investment at 26 cents per share has yielded substantial returns, and she was invited to ring the opening bell at Nasdaq during Chime’s IPO.
Why it matters: Chime’s journey from near collapse to successful IPO exemplifies resilience and determination in the challenging fintech startup landscape. However, experts remain cautious about broader market implications.
The details:
- Economic and political uncertainties persist, and many startups are adjusting to inflated valuations from 2020-2021.
- The number of startups filing to go public remains low, indicating ongoing market hesitancy.
- IPO activity has shown modest improvement in 2025, with nine venture-backed companies going public in Q2, up from six in Q1.
- Many companies had to accept considerable valuation cuts to go public, with Chime’s valuation dropping from $25 billion in 2021 to less than $10 billion at IPO.
“While recent IPOs are encouraging, market volatility and economic uncertainties still pose significant challenges,” Avery Marquez, Renaissance’s director of investment strategies, observed.
What’s next: Market conditions suggest a widespread resurgence of IPO activity is unlikely in the near term, with economic stability, investor confidence, and geopolitical factors playing crucial roles in determining future IPO activity.
