The VC tech world was abuzz on Thursday when neobank Chime successfully became a public company. Chime raised $864 million on a its $27 share price, which popped big, opening at $43.
This wasn’t the biggest IPO of the year. CoreWeave, for instance, raised $1.5 billion in March, and its first-day market cap hit around $14 billion, too. (Its share price and valuation has soared since then).
However, Chime’s cap table includes an absolute who’s who of Silicon Valley investors, many of whom are publicly and privately celebrating the win for their portfolio company.
This includes Iconiq’s Yoonkee Sull. He and his venture investing partner at Iconiq, Greg Stanger, spent two years watching and pursuing Chime before writing a check, Sull told TechCrunch.
Iconiq is, of course, well known in the Valley as the family office to some of the industry’s most celebrated billionaires like Mark Zuckerberg. With $80 billion of assets under management, it invests in everything from stocks to real estate and also has a venture capital arm, which largely invests at the growth stage. Its portfolio includes Benchling, Canva, Databricks, Glean, Notion, and Ramp. If you’ve heard of a company, Iconiq probably has a stake.
Sull said that he and Stanger first met Chime co-founders Chris Britt and Ryan King in 2017. They even went to the Chime offices for the meeting, not the other way around. Iconiq’s VCs tend to prefer outbound deals with well-vetted founders, rather than inbound pitch-to-us sessions.
Still, to have Iconiq come calling just a year after Britt and King’s humbling 2016 was quite the turnaround. Chime was running out of cash in 2016. King had been desperate to raise and turned down by over 100 VCs, he told TechCrunch. Lauren Kolodny, then a partner at Aspect Ventures, today a co-founder of Acrew Capital, saved the company with a $9 million Series A extension round.
Sull admits that that casual 2017 meeting “was early days at that point in time, but I think what they wanted to accomplish and do was crystal clear,” Sull says of the founders. Chime positions itself as banking and credit-building resources for the average person and working class — the ironic opposite from Iconiq’s bread-and-butter wealth management business.
As the VCs watched the founders over the next two years “deliver against the things that they said they would do,” Sull says, Iconiq was convinced to elbow into Chime’s oversubscribed $200 million Series D in 2019. Series D investors paid $5.22 a share, Chime disclosed in its S-1 filings.
“When we made our investment in 2019 there were quite literally a couple dozen other competitors going after a similar thesis or idea,” Sull said. Iconiq chose Chime, and participated in follow-in rounds, because the investors thought the founders were more focused and didn’t get distracted by “shiny new objects.”
For follow-on rounds, Series E investors paid about $41, and Series F at $60 a share, Chime disclosed. So even with a solid IPO, not all the private shares are above water yet.
Sull wouldn’t comment on how much Iconiq paid for its stake, which is not large enough to be publicly disclosed. But he did say Iconiq didn’t want to liquidate.
“We have our shares, and we’re selling in the IPO,” he said. Existing shareholders, including employees, are now subject to a 180-day lock-up period, too.
Iconiq is one of many of Chime’s backers taking a victory lap at Chime’s graduation to become a public company. Investor Shawn Carolan, from Menlo Ventures, wrote in his congrats blog post: “As with most consumer tech winners, what may have looked to some like an overnight success story was actually many hard years in the making.”
Then there’s Cathay Innovation, which led Chime’s $15 million Series B in 2017 and happily sold 3.75 million shares in the IPO of its 15.3 million share stake. Series B shares were priced at 47 cents, Chime disclosed.
