Chime acquires Salt Labs to expand its reach and start selling on to employers.
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Chime, the most important digital bank within the U.S., which offers services starting from free checking accounts to secured bank cards, has acquired Salt Labs, a two-year-old fintech startup. Salt rewards hourly staff with loyalty points (independent of the wage they receive from their employer) for the shifts they work. These Salt points can eventually be exchanged for rewards akin to NASCAR tickets, travel and financial investments. Employers pay for the service to enhance retention of hourly staff with high turnover and promote worker “financial well-being.”
Chime paid $14 million in money plus 0.9 percent of its equity for the New York startup, in keeping with an individual aware of the deal. The company will retain most of Salt Lab’s 30 employees, including co-founder and CEO Jason Lee, who previously co-founded DailyPay. DailyPay allows employees to access their pay shortly after a shift and sells its services on to employers. Assets first reported the news of the acquisition of Salt Labs.
Lee and his Salt Labs team might want to hit multi-year performance targets for Salt Labs shareholders to earn the 0.9% stake in Chime shares. While Chime’s valuation is hotly debated, for those who value the private company at $8 billion, as we did in our recent Chime profile, the 0.9% stake represents a $72 million payout on top of the $14 million in money.
Salt Labs launched a yr ago and 6 months later it told us (in its Forbes Fintech 50 application) said it had five enterprise clients, including Nashville-based Parking Management Company. It has raised $18 million in funding, most recently at a valuation of $80 million.
The acquisition is a brand new strategic beachhead for Chime – the corporate is now seeking to sell its products to employers, who can ultimately offer Chime’s broader range of banking services to their employees. However, the person users targeted are Chime’s core middle-income customer base.
Salt Labs CEO Jason Lee will lead the corporate at Chime. His relationships with employers and experience constructing DailyPay – along with Salt Labs’ core product – were the first reasons for the acquisition, in keeping with Chime Chief Operating Officer Mark Troughton.
This is one other way for Chime to realize its long-standing goal of getting customers to make use of Chime as their primary checking account and have their paychecks deposited directly into the digital bank. Chime makes most of its money from the fees merchants pay when its users use their cards to make purchases. Because Chime doesn’t have a banking license, it partners with traditional banks like Bancorp to supply banking services.
The sale also marks a fast exit for Jason Lee, a former Goldman Sachs executive who tried to sell DailyPay to Chime for $2 billion in 2022. After DailyPay’s board rejected the deal, Lee was fired and subsequently sold his DailyPay shares, in keeping with an individual aware of the matter. In his recent role at Chime, Lee will now compete directly together with his own creation.
