Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Shares in mobile payments group Chime surged on the company’s debut in New York, underscoring investor optimism for fintech amid a burst of activity in the US initial public offerings market.

Chime opened on Nasdaq at $43 a share on Thursday, 59 per cent above its $27 IPO price, to give the group a fully diluted market capitalisation of about $17bn. The shares edged down to $40 in early-afternoon trade. About 32mn shares were sold, raising $864mn for the company. 

Chime offers no-fee banking services for Americans earning less than $100,000, a market the company views as underserved by traditional banks.

“Our message . . . on how banking is fundamentally broken is really resonating,” said chief financial officer Matt Newcomb.

Chime delayed its float as US President Donald Trump’s so-called reciprocal tariffs in early April unleashed volatility across financial markets. Chime’s last venture capital fundraising in 2021, during a frothy period for tech start-ups, valued the company at $25bn. 

The US IPO market has reopened as Trump backpedalled from some of his more aggressive tariff plans, easing stock market volatility in the process. The vast majority of US IPOs take place when the Vix index, a measure of expected stock market volatility, is at less than 25. It is currently at about 18, down from more than 50 in early April.

Separately, shares in space and defence group Voyager more than doubled on the company’s debut on Wednesday. But cryptocurrency groups have been at the forefront of the IPO market’s nascent revival.

Shares in Circle Internet climbed 168 per cent on its first day of trading last week, while cryptocurrency exchanges Bullish and Gemini — which are backed by Peter Thiel and the Winklevoss twins, respectively — have both recently filed to list in the US.

Unlike traditional retail banks, which make money through lending, Chime primarily makes money by collecting payment fees. Its listing comes as retail banks are preparing for increased financial stress among US consumers due to concerns that Trump’s tariffs will slow US economic growth or even cause a recession.

Chime — which says it serves “everyday Americans who live pay cheque to pay cheque” — has not seen any decline in consumer strength, said Newcomb. But he added the company was keeping a close eye on the unemployment rate. Essentials such as gas, groceries and utilities account for about 70 per cent of its customers’ payments.

Chime provides current accounts and person-to-person money transfers through two banking partners, The Bancorp Bank and Stride Bank.  

“We don’t feel like we need a bank licence to serve our members in a great way,” said Newcomb. “Much like Uber doesn’t need to own cars to offer a better transportation service, we don’t need to own a banking charter or branches or ATMs.”