As of 30th Aug 2020

Exec Summary

What - Oldest challenger bank (est 2013) with fast growth (1M users in 18 to 8M in 2020 pre-covid), revenue from interchange on DC only ($100M-200M), lean team - 300, focused on paycheck to paycheck customers (killer feature - 2 days early paycheck advance)

So What - Will continue to grow fast (Covid is catalyst), will launch more products (Credit card, PL, installment loans) and become full fledged bank.

By 2030: $50B company (10x Rev - rich SaaS multiple). $5B Revenue → $3B from 1% interchange on $300B TPV [Avg $12K spend per yr, 25M customers (today at 4M already)]. $2B from lending, credit card products ($50B in consumer finance at 2% RoA, $1B & 1.5% interchange on CC with xx accounts)

Now What - Join them or Invest in them or Track them

Baseball Stats

Founded: 2013

Employees: 535

Total Raised: $1B

Valuation: $6B

Funding

$0.7B@$6B in Mar 2020 (E) led by DST

Company Overview

Mobile first, no fee, digital only bank targetted at Americans who live paycheck to paycheck.

Key Investors

DST Global, Menlo Ventures, Coatue, General Atlantic, Dragoneer Investment Group, Iconiq Capital, Forerunner Ventures

Product

• Current Features
• Future Roadmap - laser focused on US and limited products. Intl is distraction as per them.
• (Bonus) Product feedback
• Product edge → Chime has been around for 7-8 yrs (had its own ups and down in the journey), and benefit was that they built complete stack internally without FIS/ Jack and Henry components (Which Simple did and it constrained them). Biggest benefit is flexibility + ability to control Ux via own tech.
• Product Journey

Market (TAM) / Competition / Moat

1. TG - Paycheck to paycheck living customers (8M users today).
2. TAM - 50% Americans have <$1000 in savings bank acc.
   1. Secular growth as these customers aren't profitable for big banks (high costs hence high fees. Chime flips it with high interchange (small bank partner) + low costs (no branch, lean org). Cx is great due to no legacy tech.
3. Core thesis - 'Fee Free' digital banking (US banks collected $34B in OD fees in 2019)
   1. JPMorgan/ BoA charge $35 for every overdraft, and $12 in monthly maintenance fees
   2. Only fee that Chime charges is $2.5 on non-network ATM withdrawl
4. Killer feature - Early paycheck advance - 2 days before real pay credit
   1. Increases stickiness and makes it primary account