The US neobank Chime is in talks to raise a new round of funding that could give it a valuation of $12 billion to $15 billion, according to two sources familiar with the matter.
Even the low end of that range would more than double Chime's last private valuation of $5.8 billion in December 2019 and make it the most valuable challenger bank worldwide, ahead of Brazil's Nubank.
Chime is looking to raise at least $500 million in the round, said one of the sources, who spoke on condition of anonymity because they were not authorized to speak publicly about the talks.
A spokesperson for Chime declined to comment.
Chime, founded in 2013, has more than 8 million customers, and it's seen major growth throughout the coronavirus pandemic.
In December, the bank raised a $500 million round led by Twitter and the Revolut backer DST Global, but it has seen rapid growth in 2020. A deal could be closed imminently as part of a syndicate of new and existing investors, one of the sources who has direct knowledge of the process said.
Late-stage investors have taken a greater interest in the financial-services space following the rapid growth of the stock-trading app Robinhood, a source who is familiar with Chime's business said. Robinhood raised $200 million in August at a $11.6 billion valuation, up from an $8.6 billion valuation that it achieved just a month before.
Chime's growth has exploded amid the coronavirus
Chime was in the news throughout the coronavirus pandemic after it announced plans to hand a $200 advance to customers as part of an extension to its popular SpotMe feature. That was after the government announced the Coronavirus Aid, Relief, and Economic Security Act, a $2 trillion package to provide aid to businesses and people.
When stimulus money was distributed, which an estimated 93% of Americans were eligible for, Chime managed to get it into the hands of many of its customers before most of the big banks. Chime had already distributed more than $1 billion in stimulus payments to over 600,000 customers two days before many of the banks were able to distribute the funds.
A Chime spokesperson told Business Insider in April that the bank saw the highest number of account openings in its seven-year history.
Chime initially made waves by offering its customers a feeless checking account, a rarity among traditional US banks. The biggest US banks each make about $1 billion a year in fee-related revenues, something that Chime is seeking to disrupt. PNC Bank, the US's ninth-largest bank, made a whopping $1.7 billion in fee revenue last year alone.
The startup has attracted funding from major venture-capital firms, including Dragoneer, Menlo Ventures, and Cathay Innovation.
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