San Francisco-based online banking company Chime has made 12 per cent of its staff redundant.

The news was initially reported by The Information and later confirmed by a spokesperson for the company who said that “current market dynamics” have led it to cut around 160 jobs.

Chime’s business model is based on earning a fee from payment processors every time a customer uses a Chime debit or credit card. It was valued at US$25 billion in a funding round in August 2021, and the company was aiming for a value of up to $40 billion for an IPO in New York.

The company was founded in 2012 by Visa and Comcast alums (respectively) Chris Britt and Ryan King. Its main competitors in the US market include Current, Revolut and Varo.

Chime is the latest victim of 2022’s tech rout on FinTechs, with this news coming several months after Klarna – which had been heralded as Europe’s most valuable startup – saw its valuation drop from a high of $46 billion to $6.7 billion in July.

Digital banking and payment companies rose to prominence during the pandemic at a time when consumers were increasingly receptive to digital banking services. However, the rise of BigTech players like Apple and Google in the payments space, along with the evolution of traditional banks, has left these smaller companies in a tricky predicament ahead of a long winter.

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