A war is brewing in digital banking, and one leading player just loaded up on ammunition.
Chime, the largest of a new breed of branchless U.S. banks, raised $500 million in a series E round it closed recently valuing the company at $5.8 billion, according to people with knowledge of the situation. That is a remarkable increase from its last round nine months ago, when it raised $200 million at a $1.5 billion valuation.
The move shows that for select start-ups, massive amounts of cash are still readily available, even after investors have grown skittish after Uber and WeWork exposed excesses in private funding markets. The $500 million it raised, led by DST Global, is the biggest single equity investment for a so-called challenger bank, eclipsing the $400 million garnered by Brazilian firm NuBank, according to CB Insights.
Chime CEO Chris Britt plans on using the funds to develop new products and double his employee count by the end of 2020, including a new Chicago office, according to one of the people, who declined to be identified speaking about the bank’s strategy. It will also weigh acquisitions of other fintech firms, this person said.