The Chime IPO Will Kickstart A Fintech Investment Comeback

Forbes

14-06-2025

Chris Britt, co-founder and chief executive officer of Chime Financial Inc., during the company's ... More initial public offering at the Nasdaq MarketSite in New York, US, on Thursday, June 12, 2025.
Chime launched its IPO with a splash. Shares jumped as much as 59% above the $27 offering price—opening at $43 and closing near $37—marking a bold public debut for the US's largest neobank. With a valuation hovering between $11.6 billion and $15 billion—well below its 2021 private peak of $25 billion—the surge raises the question: Will this trigger renewed investment in neobanks and fintech?
Chime's IPO follows strong debuts from fintechs like Circle and eToro. PitchBook's Rudy Yang framed Chime as 'a strategic breakthrough—marking a return of fintech liquidity' after the sector saw VC exit values plummet from $222 billion in 2021 to under $30 billion in the past few years. Chime could be a bellwether for a neobank--and broader fintech--recovery if it:
There is another side of the coin:
Is Chime's IPO really a pivotal moment for the fintech industry and a validation of the digital-banking model and a template for future bank challengers?
No. Chime's debut feels more like a secure base camp than a flag planted atop Everest. It suggests that public markets are open to credible fintech challengers—provided they bring scale, strong unit economics, and realistic valuations.
The critical questions for neobanks: 1) Can they diversify revenue beyond interchange (loans, wealth, insurance)? 2) Will macro conditions hold stable enough to sustain IPO markets? 3) Will consumer-trust and customer growth trajectories support future public offerings?
The answers are no.
There are market factors impacting neobanks that have closed the door to new neobanks coming into the market:
1) Megafintechs have better economics and business models. Among consumers who consider a digital bank or neobank their primary checking account or payments provider, half of them say their primary provider is PayPal or Square Cash App. Neobanks don't just compete with incumbent banks—they compete with the megafintechs, whose platform business models give them scale and revenue diversity.
2) Interchange isn't a reliable revenue source. Relying on interchange runs against consumer behavior trends regarding:
3) The niche affinity play is tough for startups. This strategy requires neobanks to identify a segment's unique financial needs and Be the dominant affinity. Neobanks' claims of how big their affinity groups are misleading because most of us belong to multiple affinity groups.
Fintech has entered a new phase—one defined by realism, consumer impact, and long-term value creation. The new phase, however, isn't about bank disruption and displacement--it's about banking industry infrastructure upgrade and replacement.
The Chime IPO will help create more VC interest in fintech investment--but that investment won't go to new neobanks. Instead, it will go to startups that bring two things to the financial services industry: 1) AI-driven process reinvention from machine learning, Generative AI, and Agentic AI tools and technologies, and 2) Stablecoin and other cryptocurrency-related payments innovation.
The latter may do more to disrupt banks than Chime and other neobanks have done.