Chime’s IPO represents a marquee milestone for the U.S. FinTech industry: marking a validation of its novel BAAS-powered business model, an impactful liquidity event for its marquee investor base and employees and a preview of what’s to come in the next wave of FinTech IPOs.  

Key takeaways from Chime’s IPO:

Validation of the banking-as-a-service (BaaS) model

Chime’s trajectory — powered by partnerships with The Bancorp Bank and Stride Bank — demonstrates that a bank-sponsored FinTech can scale meaningfully while delivering real value to customers and bank partners alike. Without this partnership, Chime’s unique value proposition for underserved banking customers would not be economically possible. Will Chime ever become a bank? Maybe — but there’s no pressure to do so in the near term. 

Proprietary ChimeCore is a long-term competitive advantage

Chime has developed a proprietary core banking platform and data infrastructure, giving it a significant product, compliance and cost advantage. Versus the status quo of banking institutions that are largely reliant on third-party cores, ChimeCore positions the company to own and leverage its own data and infrastructure at a critical point as AI models get deployed across tech stacks globally. ChimeCore significantly reduces Chime’s counterparty bank sponsor risk and enables it to maximize agility, compliance and customer experience at its own pace.

Challenging the legacy NIM bank business model

Chime’s business model is purpose-built for everyday American consumers and representative of a ~$86 billion TAM based on its existing product set and focus. While traditional banks rely on a balance sheet-heavy net interest margin (NIM) model, Chime has built a balance sheet-light, highly recurring interchange fee business model driving superior gross margins. Given the growth and asset acquisition demand of of private credit markets, Chime should be able to stay balance sheet-light for the foreseeable future, even as it expands its credit suite to larger-ticket, longer-duration products.

Accelerating flywheel sticks the profitability landing  

Chime stuck the landing on its path to profitability, posting $25 million of adjusted EBITDA in the first quarter of 2025 while maintaining best-in-class 30% growth. The company has multiple levers to drive continued expansion: growing its active customer base, deepening engagement and improving transaction margin through scale and product innovation — resulting in clear operating leverage and durable unit economics. Look no further than the attachment realized by Chime’s MyPay earned wage access (EWA) product, launched in July 2024. Since launching, Chime has originated ~$9 billion in EWA volume in less than a year with a 26% attachment rate and strong credit loss levels. For comparison, Dave, a leading EWA FinTech founded in 2016, originated $6 billion in annualized EWA volume in Q1’25 and has seen its market cap surge.

From FOMO to fundamentals — why FinTechs’ best days are directly ahead  

Beyond Chime, the FinTech industry is poised for an exciting path ahead. Compared to the 2021 peak — characterized by unicorn valuations on FOMO multiples — today’s landscape reflects a matured market. Leading FinTechs — of which there are many, from digital banks and lenders to payments companies — have continued to scale revenue growth and diversify products and channels, and have learned to balance growth and profitability in more discerning capital environments. Overlay that landscape with a constructive IPO market and normalized valuation expectations, and we should not be surprised to see a flood of IPO activity from here as the demand from VCs for liquidity grows.

At Texas Capital, we’re honored to have played a role in Chime's marquee transaction. Our Financial Technology platform offers tailored banking and advisory solutions across the FinTech ecosystem, from Series A through IPO. Texas Capital’s full-service platform includes a comprehensive suite of advisory, capital markets and liquidity and payment solutions. 

This is not a research report. The information provided is for informational purposes only and does not constitute an offer to buy or sell securities. TCBI Securities currently does not have analyst coverage on Chime Financial Inc.