US mobile banking challenger Chime raises $70m
It also reached over one million bank accounts this month
US mobile banking challenger Chime has raised $70 million in Series C financing, led by Menlo Ventures.
The round, which also included existing investors Forerunner Ventures, Aspect Ventures, Cathay Innovation, Northwestern Mutual, Crosslink Capital, and Omidyar Network, brings the firm’s total funding to over $100 million and values the business at around $500 million.
Chime’s co-founder and CEO Chris Britt tells TechCrunch: “I started this company because Green Dot [he worked there] was really focused on the unbanked and under-banked people who couldn’t get bank accounts because they had bad credit or bad cheques – that sort of thing.”
He adds: “It was really not a full-featured bank account. And so what I wanted to do with this company was create a product that would serve more mainstream consumers – people who actually had accounts at [Bank of America] and Wells Fargo, but just aren’t particularly satisfied with those guys for variety of reasons – probably first, and foremost, the way they structure the products are quite punitive.”
With the new funding, Chime plans to expand its 80-person team in San Francisco to over 100, and offer more products and new features.
The firm, which was founded in 2014, has got plenty of momentum. Earlier this month, it said it reached over one million bank accounts.
This follows on from September 2017, when it raised $18 million in Series B financing, led by Cathay Innovation. Britt also reported that more than 500,000 bank accounts had been opened since its launch.
Chime, which offers its banking services through a partnership with The Bancorp Bank, doesn’t charge fees.
The challenger says: “Unlike traditional banks that charge consumers fees left, right and centre, Chime makes its money from Visa.”
It explains that whenever a user makes a purchase using their Chime Visa Debit Card, Visa collects the interchange fee from the merchant for processing the payment. A portion of this interchange fee is then paid out to Chime.
