Chime IPO tests market appetite for fintech investment

Chime’s initial public offering, filed this week, is likely to test the waters for other fintechs considering going public within the next year.

“We are excited to see Chime tap the public markets at a pivotal moment after weathering the capital markets deep freeze that has paralyzed fintech IPOs,” Pitchbook senior analyst Rudy Yang said. “The timing is undoubtedly bold, but it is a strategic play that balances opportunity with calculated risk. A strong reception may help catalyze a long-awaited revival in fintech liquidity.” 

This would be a significant breakthrough given the drop in fintech venture capital exit value from IPOs from $222.4 billion in 2021 to $29.1 billion across the subsequent three years and through the first quarter of 2025, Yang said.

“Chime still faces a crucial litmus test of investor sentiment toward digital banking platforms,” he said. “Its 32% year-over-year revenue growth in the first quarter of 2025, coupled with its pivot toward profitability from losses in the prior year period, demonstrates a substantial improvement in fundamentals that puts it closely in line with metrics of other publicly listed neobanks.”

Pitchbook analysts valued Chime at $25 billion after its last major round valuation in 2021. Today, analysts put it at $15 billion-$20 billion.

“Chime’s IPO marks a critical turning point for fintech, signaling that the IPO window is reopening for scaled, profitable private tech companies,” Greg Martin, managing director at Rainmaker Securities, told American Banker.

“It also shows that markets now favor profitable growth over high-burn scale. If successful, it could re-open the door for delayed IPOs in fintech, AI and health tech,” Martin said.

Chime is likely the first big global deal to test the market, according to Mergermarket Head of Global Equity Capital Markets Samuel Kerr.

“Inherently that is more challenging, given the quantum of demand required to get bigger IPOs to market,” he said.

Kerr also has doubts whether Chime’s IPO singularly indicates that the market is prepared for a full IPO resurgence, especially as conditions remain uncertain. He believes that the current rally might be overstated, and that deals are unlikely to bounce back in the way investors are hoping.

“We have seen a nice bounce in underlying indices in the U.S. and Europe, but there is still huge uncertainty ahead,” he said. “What happens at the end of the 90-day pause on tariffs for European and Chinese imports into the U.S. — will more trade deals be announced before then? Also, even though there has been some scale back in the severity of the tariffs for now, we are still in a far more precarious economic situation than we were at the start of the year and even a 10% universal import tariff in the U.S. is going to impact business. Investors are likely to still remain defensive, and the market could shut again should things turn for the worse.”

Conversely, Bank Slate Chief Executive Officer Paul Davis told American Banker that Chime is less likely to be impacted by trade policy changes due to its domestic consumer base.

“We’ve seen some of the other folks press pause, Klarna in particular, but I think some of it has to do with the business model,” he said. “Klarna is a foreign company with a buy now/pay later centric model. That’s a lot different than Chime, a U.S.-based company who, by and large, is still focused on its U.S. client base. They have a model where the IPO could still do well in this environment, whereas maybe Klarna felt a little bit nervous as a foreign company going public.”

Chime currently has 8.6 million active members, defined by the company as users who have initiated a money movement in the past month. This is a 23% increase from 7 million active users this time last year. About 67% of Chime’s active members rely on the neobank for their primary financial accounts, according to the company.

“The number that really surprised me was how many active members treat Chime as their primary account,” Davis said. “This is not a case of somebody always having a normal bank account and then Chime is their side account. It’s the opposite: Chime is the main attraction.”

Chime posted $519 million in revenue through the first three months of 2025, an increase of 32% from the same reporting period last year, according to its prospectus filed with the U.S. Securities and Exchange Commission. The fintech also hit $1.67 billion in revenue for 2024, giving it a 30% year-over-year increase in revenue.

Davis highlighted Chime’s digital-first business model and well-established customer base as items of note for other banks wanting to know what Chime’s IPO potentially means for them, especially as Chime positions itself as a direct competitor to traditional banking institutions.

“It’s a great blueprint for traditional banks to try to figure out what they need to do with their tech stack as well,” he said. “It’s certainly a call to traditional banks to not be complacent with their tech stack. … In today’s banking landscape, owning your tech stack is no longer optional.”