Iconiq Capital, a prominent family office managing $80 billion in assets, has reaffirmed its commitment to Chime, the financial technology firm co-founded by Chris Britt and Ryan King. Iconiq, who has already put two years of capital into the company. Until now, they’ve waited and chosen not to engage in a secondary sale of their shares following Chime’s favorable recent IPO. This decision is further illustration of Iconiq’s faith in Chime’s long-term growth trajectory.
In 2019, Iconiq led a Series D funding round for Chime, investing alongside other venture capitalists. At the time, Chime was a $1.5 billion valuation, and that Series D round cost the new investors $5.22/share. The funding round raised a total of $200 million, allowing the company to solidify its position in the competitive fintech space.
Chime’s road to success has certainly been paved with exciting achievements, but has also experienced its fair share of obstacles along the way. Lauren Kolodny, former partner at Aspect Ventures, led a key $9 million Series A extension round into 2016. This funding was instrumental to the early success of the company, allowing it to stabilize in a very competitive landscape.
Chime’s growth trajectory has been impressive. The company raised money on its Series B at a paltry 47 cents per share. In contrast, its Series E investors initially shelled out about $41 per share. In its most recent funding round, Series F investors bought shares at $60 per share. The firm completed a blockbuster IPO that raised $864 million. It opened at a share price of $43, nearly doubling the original offering price of $27.
Yoonkee Sull, a partner at Iconiq, painted the competitive picture that Chime was up against at the time of their investment.
“When we made our investment in 2019 there were quite literally a couple dozen other competitors going after a similar thesis or idea.” – Yoonkee Sull
It is the specific strategic decisions made by Chime’s leadership during its formative years that have allowed it to be so successful today. One of the most notorious investors in fintech, Shawn Carolan, has retorted that Chime’s overnight success took many years to materialize. It has taken years of advocacy and activism to reach this moment.
“As with most consumer tech winners, what may have looked to some like an overnight success story was actually many hard years in the making.” – Shawn Carolan
Iconiq’s recent decision to hold onto its shares is an early sign of a new trend among investors. They are recognizing the huge value in fintech companies such as Chime. The firm’s creative, customer-lead touch to offering banking services has netted them millions of customers. This strategy has already proven to position it as an industry leader.