Chime won't save fintech or the public markets

There's reasons to be optimistic, but you just need to know where to look

June 17, 2025

My first ever event was a success!

35 of you showed up to my first in-person event in Los Angeles last week.

It was one of those rare nights where everything just clicked. One attendee told me it was their favorite event they had been to in a long time. What made it work?

Zankou Chicken certainly helped.

I stepped back. No panels. No agenda. Just an open evening for people to connect over good food and real conversation. And it turns out that people really needed that. I have always believed that strong communities are built by curating the right minds and giving them space to collide. That bet continues to pay off.

I am carrying that same spirit into my next gathering: an intimate dinner with a handful of GPs in San Francisco to swap stories about what it really takes to raise and run a small fund. After that, I will be heading to Austin and Miami this fall and winter. If you are an investor or builder in those cities—let's connect.

And speaking of building in a tough environment, investors are getting excited about the Chime IPO. But beneath the headlines, what does its potential listing really tell us about not only the state of fintech, but also the muted IPO market of the past few years?

Let’s take a closer look.

🏦 Chime’s IPO is not going to save us

This week’s headlines were hard to miss: Chime is finally going public.

Exuberance among the LinkedIn glitterati and other hot takes suggest a long-awaited “win” for fintech:

For a sector that has spent the last few years weighed down by compressed multiples and skeptical public markets, the excitement is understandable. IPOs have been few and far between, and even rarer are ones from consumer fintech players that captured mass market attention like Chime did in the late 2010s.

But context matters — and so does caution.

IPO volume and performance over the past decade tell a sobering story.

Outside of the COVID outlier year, IPOs have been relatively stable.

Most companies going public in recent years have failed to sustain their debut-day momentum. Many are trading well below their offer price. And for consumer-facing fintechs in particular, public market scrutiny often shines a light on business model challenges that were easier to overlook in private.

Chime is no exception.

Yes, it built a strong brand and reached tens of millions of users. But growth is capped. Its model — centered around low-balance, debit-preferred customers — faces structural limitations. As users graduate financially, they tend to move on. And while it can still win share in its core demographic, competition from Cash App, Zelle, and newer entrants is increasing. (Sidenote: check out another excellent newsletter, Payments in Full, for a detailed analysis on Chime).

Meanwhile, Chime’s marketing-heavy approach continues to eat into margins. Its core revenue stream — exempt interchange fees — is under threat from potential regulatory changes and routing competition. If users shift toward credit cards, the company risks losing up to 85% of revenue per account, even if it retains the underlying deposit relationship.

Chime’s diversification options are also limited. In the higher-balance segment, checking is free and credit cards are standard. In lending, better-positioned players already dominate — whether it is buy now, pay later (BNPL) or earned wage access (EWA). The result? A consumer fintech platform with massive brand equity, but diminishing structural advantages.

Chime may go public. It may even trade well for a while. But it will not save fintech. And that is perfectly fine — as long as you know where the real value is created.

So what does this all mean for the future?

1️⃣ Investing is a long game. The best returns often come from long horizons, not fast flips. Chime's earliest backers — like PivotNorth and Crosslink — placed their bets when the company was little more than a debit card with a rewards app. They earned their wins not from IPO hype, but from patience, secondary sales, and sustained conviction. I remember when I joined Netflix in 2012, someone in my orbit told me to call them when the company inevitably went under. That same person is now a venture capitalist. It raises a broader question: how many VCs are truly long-term believers, and how many are just chasing the moment?

Netflix’s share price is a testament to the long-term nature of investing.

2️⃣Markets have changed, maybe irrevocably. We are no longer in the ZIRP-fueled boom years. The IPO window has narrowed, multiples have compressed, and both public and private investors are more skeptical. In this new normal, many companies will face longer periods of mediocre performance — unless they radically reinvent themselves. Some, like Netflix, will pivot and thrive. Others will end up as acquisition targets or get taken private. Chime sits at an inflection point. Its core market — low- to moderate-income, debit-focused users — is capped. Without a strong credit offering, its ability to move upmarket is limited. Its revenue, dependent on interchange, faces regulatory headwinds. And while its brand remains strong, its long-term competitive advantage is less clear than it once was.

3️⃣ Early Entry Price is Everything. The real winners from Chime’s IPO are not the ones holding common stock at the offering — they are the ones who got in early. Crosslink reportedly turned a $6.4M stake into a multi-hundred million dollar return, with some of that already realized through secondary sales. PivotNorth made nearly 100x. This aligns with what we talked about 2 weeks ago: secondaries and SPVs are tools, not shortcuts. Anyone who has ever evaluated investments knows that one of the biggest driver of a strong returns is a low entry price. Being the first or second check — not the last one before the exit — is what drives meaningful outcomes.

Not everyone will be a winner in Chime’s IPO.

Your turn⬇

Are you bullish or bearish on $CHYM ( ▲ 5.81% ) ? Share your thoughts in the comments.

🎙 Content Recap

🎧 I had a very special conversation with Drew Barvir, the co-founder and CEO of the mental health startup Sonar for Money Memories. Drew’s remarkable story of loss and perseverance is one that we can all take inspiration from. Listen and subscribe wherever you listen to podcasts, including Apple and Spotify.

📍 Where I’ll Be / Where I Want to Be

If you are attending any of these upcoming events, let me know. I would love to find time to connect:

  • June 24 - 27: I’ll be back in San Francisco for the Wharton Global Forum. I will be attending a founder meet-up on the 24th and hosting a small dinner for early stage investors on the 25th.

  • August TBD: I’m cooking up an exciting women’s digital health collaboration with AllThingsFemtech. More to come!

  • 29 September - 2 October: I’ve registered for Sibos’ Frankfurt conference. It’s still a few months away and I’d like to get started on partnerships, so message me for collaboration opportunities.

If you’re in any of these places, add these to your radar:

💼 Job Openings

Continuing with the job openings I highlighted last week. Message me if you know anyone who you think would be a great fit.

If you have any relevant openings you’d like to share, send me a note and I will feature it in an upcoming edition.

🔗 Other Interesting Reads & Listens

📌FIFA Slashes Ticket Prices for Club World Cup: Well, well, well, if it isn’t the consequences of FIFA’s own actions.

📌The Story of Zankou Chicken: one of the attendees of my June 10th event told me that there was a tragic story behind Zankou, a beloved LA chicken chain. I was really captivated by this complicated and remarkable read.

Want to sponsor this newsletter and reach a rapidly growing audience of engaged investors, operators, and builders in tech? Let’s talk.

Till next week
💛 Ilona

Reply

or to participate.