Chime Raises $18 Million for Its Fee-Free Mobile Banking Platform
Mobile banking company, Chime, has raised $18 million in financing and will try to woo Millennials with an offer of no monthly fees, overdraft charges, foreign transaction fees or ATM fees.
The new funding comes from a number of companies including Crosslink Capital, Forerunner Ventures and Northwestern Mutual Future Ventures. This brings their total funding to $36 million.
In addition to accelerating growth, Chime plans to use this new financing to introduce new products. For example, a new feature will allow users to open APIs and partnerships with other financial institutions so that consumers can use their Chime account as a hub for all of their finances.
Launched in 2014, Chime has enrolled 500,000 customers, most of whom are in their late 20s and make between $50,000 and $70,000 each year.
Since Chime does not charge fees, it makes money through debit card transactions where it earns 1.5% per transaction.
Chime also offers an automatic savings tool, which allows users to round-up transactions to the next dollar so they can effectively put their “spare change” into a savings account. Users can opt to deposit up to 10% of their paycheck into their savings. On its website, Chime says their mission is to “to empower people to lead healthier financial lives,” which includes making it easier to save. Many Americans are struggling to save each month.
Chime is available for Apple and Android devices.