CEO & Co-Founder, Chime
Chime Attracts Digital-Savvy, Less Affluent Customers
Chime issued guidance that topped analyst expectations, driven by rising user growth and strong demand for its digital banking products. Chime CEO Chris Britt joins Caroline Hyde and Ed Ludlow on “Bloomberg Tech.”
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About Chris Britt
Chris Britt, CEO and co-founder of Chime, announced the launch of Chime Invest, a new feature allowing members to buy stocks or ETFs. Britt described the feature as addressing "the divide in America" and stated that "getting a piece of ownership in the country and long-term success of our economy is critical for the health of the nation and member base." He contrasted Chime's approach with other investment apps, saying that while those apps are "awesome and huge success," they "tend to be separate from one's primary bank account" and "focus on driving trading activity." Britt argued that Chime's integration with a user's primary deposit account is a key differentiator, emphasizing that "the most important thing about investing is not timing the market but having time in the market." Regarding Chime's stock performance, Britt acknowledged that the company has been "public for about a year" and that while he is "not happy about the stock price," he is "happy with the performance our team has delivered." He noted that Chime has reported "four quarters straight continuing to grow topline" and predicted that "as we continue to execute... the weight and the success and results we will deliver will come through and show in the performance."
Transcript (8 segments)
I
Interviewer0:00
Actually, the other thing you're getting a lot of credit for is a technology story. A lot of the transition to your own tech stack, how you've managed the company. You don't need to grow headcount necessarily because of the focus and investment you've made on tech. Do you mind if we start with that and explain a bit about the strategy behind that?
C
Chris Britt0:18
Yeah, absolutely. And first of all, thanks for having me today. I'm so proud of this team and the way that we've executed. I think we're shipping faster than ever. And you know, if you just think about this first year, this is the first time we're reporting as a public company our full year results and they were outstanding. You know, we added 1.5 million new active members, we're now at 9.5 million actives. We took the company public. We launched a range of new products. We launched a new business in our enterprise channel. And yes, to your point, we completed the conversion of our core processing and ledgering system onto our own in-house tech stack top to bottom. And that's really unleashed, not only lowered costs, but also unleashed a whole set of new products and services for our members that drove awesome results for the year of $2.2 billion of topline revenue, growing over 30%. And we got to a 10% EBITDA margin in Q4. So feeling good across the board and this technology platform really is an enabler for our future growth.
I
Interviewer1:23
Last month I saw on your own website you did this kind of blog post. It was 'What is Chime? Chime is not a bank.' But if you consider what the products you're offering are, a big part of where the street's focused on is new products coming to market and how you've monetized that. So you take Chime Card for example. Through that lens, explain what you are, but also how you've been able to launch a sort of wider offering of financial services as a fintech company.
C
Chris Britt1:52
Right. Chime at our core, we're a technology company. We partner with banks. And so when you sign up for a Chime account, think of it, you're basically doing, there's a three-way relationship between the consumer, Chime as the technology enabler and brand and the design and delivery of all the actual experience, and then the bank. So we have some community bank partners that actually hold the deposits in FDIC insured accounts for our members. And this approach has worked really, really well, particularly for mainstream American people that oftentimes live paycheck to paycheck. Basically the population that makes up to about $100,000 a year. That's the segment that we serve. And we offer a range of core banking services: fee-free checking accounts, the ability to get access to short-term lines of credit at low cost or no cost, the ability to build your credit, and to earn high yield savings. And because we're a technology company, we don't have physical branches and a heavy physical infrastructure. We're able to operate at a really low cost structure and we deliver that value back to our consumers and that's allowed us to really outmaneuver the big banks. We've been continuing to increase our share of new checking accounts in America and third-party research continues to show that we are having an outsized impact and increasing our share.
I
Interviewer3:13
Let's go to swipe fees because that is where you get a lot of the revenue. Is there any issue, any concern longer term as you scale that that will become a regulatory issue as you hit certain benchmarks and amounts of money that you manage?
C
Chris Britt3:26
Yeah, I think as we've grown over the past few years, you've seen an increasing balance in our business. So, we were historically very heavily reliant on fees that we earned from Visa when our debit cards get used for everyday transactions. And we've now have a secured credit card product. We launched a product called Chime Card last year. That's a reward, a secured card that has rewards. And that's kind of changed the game for everyday transactions in America for average people, you know, average sort of mainstream consumers. And so that's also a contributing revenue line. And then increasingly we have other services. Our short-term overdraft services and our MyPay product has been an outstanding, you know, just one year in, it's almost a half a billion dollar revenue run rate that allows our members to get access to their paycheck essentially on demand. And that's also been a nice added, some additional balance to our revenue mix.
I
Interviewer4:28
I'm going to ask a sort of more complex and maybe more emotive question in some way. You've talked clearly about how you have partnerships with banks. You're not the bank. You're not taking the details of the customer in so many ways, but there has been a consideration from the Trump administration that maybe banks should collect citizenship. Now, given the people that you serve at the moment, briefly, Chris, is this an issue for you?
C
Chris Britt4:50
It's absolutely not an issue. First of all, we open up FDIC insured checking accounts in partnership with our bank partners. So we comply with the rules and regulations that are required as OCC chartered banks that offer these FDIC insured accounts. So for every new Chime member, we collect the full social security number and comply with the Patriot Act and all of the KYC requirements to open up a checking account. So any rule changes in this area have no impact on our