2020 was a record year for the U.S. IPO market. Many fintech companies like Lemonade and Root Insurance listed in the year. Affirm, another fintech company is planning to list in January after having delayed its IPO in December. Robinhood and Chime are the two prominent fintech companies that are expected to list in 2021. When is the Chime IPO date and should you invest in the company?
2020 was a pivotal year for fintech companies. Ant Financial’s IPO, which was stalled by the Chinese authorities, received bids worth $3 trillion. Its valuation was set to exceed that of JP Morgan, the largest U.S. bank.
What Chime does and what sets it apart from other banks
Chime is a new age bank that does not has any physical branches. It has online-only operations, unlike traditional banks that have both physical and online presence. Chime offers its services through its mobile app which is very popular among its users.
Chime offers several innovative and consumer-friendly features through its account. It calls its checking account a “Spending Account” and does not charges any fees or insists on a minimum balance. The company earns money when Chime users use their Visa debit card. However, the money comes from the merchant and not the account holder.
Chime processed many U.S. stimulus payments in advance
Chime also allows users to get paid two days before their paycheck. It processed $375 million of stimulus payments in 2020 for its users. It also gave a $200 advance on stimulus checks for eligible account holders through its SpotMe plan.
Digital banking has been gaining traction across the world. In the U.K., digital banking startup Monzo is giving traditional banks a run for their money. In the insurance sector also, startup financial companies have better and innovative offerings that are catching consumers’ attention as well as wallet share.
How Chime plans to go public
There are three main ways for a stock to go public. These include the traditional IPO route, SPAC, and direct listing. Chime could consider either of these routes to go public. Incidentally, Robinhood is rumored to be contemplating selling its shares directly to users on its platform.
Chime’s IPO date is uncertain but likely to happen in late 2021.
Chime hasn’t yet specified a date for its IPO. However, in Sep. 2020, Chime’s CEO Chris Britt said that the company would become “IPO-ready” within one year. He also said, “I probably get calls from two SPACs a week to see if we’re interested in getting into the markets quickly.” However, he clarified, “The reality is we have a number of initiatives we want to complete over the next 12 months to put us in a position to be market-ready.”
Chime IPO stock price and ticker
Since Chime hasn’t yet filed for the IPO, we don’t know the IPO price and the stock ticker. However, at the last funding round in 2020, the company was valued at $14.5 billion. Based on that valuation, Chime became the most valuable U.S. fintech startup ahead of Robinhood.
Is Chime IPO stock a buy?
It would not be prudent to comment on whether you should buy Chime IPO as we don’t know the valuation that it would be seeking while listing. However, the company is growing fast and is gaining a lot of popularity. It has turned positive on the EBITDA level also. If the IPO valuation is reasonable, Chime IPO could be a good IPO to buy. It is among the best bets on the growing popularity of new-age fintech companies.