Chime leapfrogs Robinhood as most valuable U.S. fintech startup

(Reuters) - Chime has raised $485 million in a new funding round that values the digital-only banking firm at $14.5 billion, a company spokeswoman said on Friday.

At its latest valuation, Chime has now overtaken Robinhood as the most valuable U.S. fintech startup.

Investors including Coatue, ICONIQ, Tiger Global, Whale Rock Capital, General Atlantic, Access Technology Ventures, Dragoneer and DST Global participated in the funding round.

Chime is among a number of digital-only banking providers that have sprung up in the U.S. and globally in recent years, as an increasing number of smartphone users switch to online transactions and digital banking services.

Chief Executive Officer Chris Britt said the COVID-19 pandemic has accelerated the adoption of more digital services.

“Nobody wants to touch cash anymore... we’ve really benefited during the pandemic because our customers use us for their non-discretionary everyday spending - to buy groceries, food and for online shopping,” he told Reuters.

Chime’s transaction volume and revenue grew more than three times in 2020, the company said in a statement.

Britt said Chime is taking steps to be prepared for an initial public offering, and could expect to go public next year. However, he cautioned that no timeline has been decided yet.

“We do have efforts and initiatives today to get ourselves into a position of being what I would refer to as IPO-ready,” he said.

San Francisco, California-based Chime's valuation has jumped nearly 900% since March 2019, when it had raised here about $200 million at a valuation of $1.5 billion.

Robinhood had raised $200 million in August from investment firm D1 Capital Partners at a valuation of $11.2 billion.

CNBC first reported the news of the funding round earlier on Friday.

Reporting by C Nivedita in Bengaluru; Editing by Krishna Chandra Eluri