FILE PHOTO: The Chime logo is seen on a smartphone placed on U.S. dollars banknotes in this illustration taken January 24, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -Digital banking startup Chime Financial said on Monday it was targeting a valuation of up to $11.2 billion on a fully diluted basis in its long-awaited New York initial public offering, underscoring the growing momentum in the new listings market.
San Francisco, California-based Chime and some of its existing shareholders are seeking to raise up to $832 million by offering 32 million shares priced between $24 and $26 apiece.
Chime is offering 25.9 million shares in the offering, while certain shareholders, including venture capital firm Cathay Innovation, are putting up 6.1 million shares.
The U.S. IPO market has sprung back to its feet after a disappointing April as equities rebounded amid easing volatility, paving the way for companies to go public after tariff-driven chaos shut the window for weeks.
Recent listings, including retail trading platform eToro, have been well-received by investors. Analysts say the stage is set for a broader IPO pickup, but stability needs to last longer before the window fully reopens.
"Momentum is building after the tariff-related volatility. Right now, investors want to see fundamentally strong companies with attractive valuations," said Matt Kennedy, senior strategist at Renaissance Capital, a provider of IPO-focused research and ETFs.
Chime, founded in 2012, offers banking products such as checking and high-yield savings accounts through its app. The company mainly generates revenue when its members spend using Chime-branded debit and credit cards.
Chime raised $750 million in a 2021 funding round at a $25 billion valuation. Its major backers include Yuri Milner's DST Global, private equity firm General Atlantic and investment firm ICONIQ.
FINTECH REVIVAL?
Financial technology listings have slowed down since the pandemic-era boom as interest rates rose and inflation surged.
Swedish fintech giant Klarna paused its U.S. IPO plans earlier this year as tariffs rattled global markets.
A successful IPO for Chime could pave the way for other fintech companies that have recently considered tapping public markets.
Chime's IPO valuation target represents prudence in giving buyers a decent discount to encourage participation, said Samuel Kerr, head of equity capital markets at Mergermarket.
"As the largest deal to test the market since 'Liberation Day,' Chime will be a fascinating case study."
Morgan Stanley, Goldman Sachs and J.P. Morgan are the lead underwriters for the IPO offering. Chime will list on the Nasdaq under the symbol 'CHYM'.
Chime plans to use a portion of its IPO proceeds to settle tax obligations related to employee-restricted stock units.
(Reporting by Arasu Kannagi Basil in Bengaluru; additional reporting by Manya Saini; Editing by Shreya Biswas)
