Home Blog Newsfeed Iconiq VCs Spent Two Years Cultivating Chime Investment; Firm Not Selling Stake Post-IPO
Iconiq VCs Spent Two Years Cultivating Chime Investment; Firm Not Selling Stake Post-IPO

Iconiq VCs Spent Two Years Cultivating Chime Investment; Firm Not Selling Stake Post-IPO

The venture capital world buzzed recently with neobank Chime’s successful IPO. The company raised $864 million at a share price of $27, which saw a significant increase upon opening, trading at $43. While not the largest IPO of the year—CoreWeave, for instance, raised $1.5 billion earlier—Chime’s cap table boasts an impressive list of Silicon Valley investors.

Among these is Iconiq Capital, where Yoonkee Sull and his venture investing partner, Greg Stanger, spent two years observing and engaging with Chime before investing. According to Sull, Iconiq prefers outbound deals, meticulously vetting founders before committing capital. This approach underscores their dedication to identifying promising ventures with strong leadership.

The story represents a notable turnaround for Chime. In 2016, the company faced financial difficulties and was famously turned down by over 100 VCs. A $9 million Series A extension, led by Lauren Kolodny (then at Aspect Ventures, now a co-founder of Acrew Capital), proved critical in saving the company.

Sull noted that Iconiq’s initial meeting with Chime co-founders Chris Britt and Ryan King in 2017 took place at Chime’s offices, demonstrating Iconiq’s proactive approach. He emphasized the clarity of the founders’ vision, focusing on providing banking and credit-building resources to the average person—a mission distinct from Iconiq’s wealth management focus.

Over the subsequent two years, Iconiq watched Chime’s founders execute their plans. This conviction led to Iconiq’s participation in Chime’s oversubscribed $200 million Series D round in 2019, where shares were priced at $5.22. Sull highlighted that numerous competitors pursued similar ideas at the time, but Iconiq chose Chime due to the founders’ unwavering focus and resilience against distractions.

Iconiq also participated in later funding rounds, with Series E investors paying around $41 per share and Series F investors paying $60 per share. Despite the IPO success, not all private shares are currently above water.

While Sull declined to disclose the size of Iconiq’s stake, he confirmed that the firm did not intend to liquidate its position during the IPO. “We have our shares, and we’re selling in the IPO,” he stated. Like other existing shareholders and employees, Iconiq is subject to a 180-day lock-up period.

Iconiq joins other Chime backers in celebrating the company’s IPO. Shawn Carolan of Menlo Ventures reflected on the years of hard work behind the apparent overnight success. Cathay Innovation, which led Chime’s $15 million Series B in 2017, sold a portion of its stake in the IPO, realizing a significant return on its initial investment.

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