SAN FRANCISCO—Chime, a fintech that offers a savings account and a debit card that doesn’t charge monthly fees or overdraft fees, reports it has raised $18 million in Series B financing for what it describes as its mobile-first approach to banking.
Without the fees, Chime said it is seeking to appeal to Millennials by touting its affordability and easy-to-use app, Tech Crunch reported.
Since launching in 2014, Chime has signed up 500,000 customers, who are typically in their late 20s and making between $50,000 and $70,000 per year. Chime generates its revenue from the accompanying debit card, where it earns about 1.5% in fees per transaction, Tech Crunch said.
Chime touts its optional automatic-saving tools, which can set aside a pre-determined amount of money or round-up to the next dollar on transactions, putting the spare change in savings, Tech Crunch noted.
“Chime is the company best positioned to disrupt the core banking relationship in the U.S. market,” Dennis Barrier, co-founder of Cathay Innovation, told Tech Crunch about why they invested in Chime. The startup is “determined to bring to Americans a healthier banking experience, which is a great need today,” he said.