Digital bank Chime quadruples valuation in less than a year to $5.8 billion as it takes on megabanks

Chime's move shows that for select start-ups, massive amounts of cash are still readily available.

But Chime appears to have struck on a winning formula: It targets the disaffected customers of traditional banks with no-fee accounts, free overdrafts and early direct deposits on paychecks. That's led to torrid growth, going from 1 million accounts last year to about 6.5 million this month.

Still, in the wake of the WeWork debacle, there is greater skepticism of money-burning start-ups with stratospheric valuations, and Chime will have to prove that it can maintain growth with an eye towards profitability.

A key to Chime's success so far is that users have to sign up for direct deposit to unlock features like early delivery of paychecks, and that makes it a core part of customers' financial lives. The bank is adding roughly 150,000 direct deposit users a month, according to the people with knowledge of the matter. Chime also recently added Mark Troughton, the ex-president of home security start-up Ring that was acquired by Amazon, as chief business officer. Axios reported in October that Chime

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