Report: Chime Tried Two Times to Buy EWA DailyPay

Chime reportedly offered two deals to buy DailyPay but neither was accepted.

The FinTech offered as much as $2 billion for the startup, The Information reported Thursday (Dec. 15).

Chime spent much of the year trying to make a deal — offering $1.6 billion in May and $2 billion in June — but members of the DailyPay board felt the bids undervalued the company, according to the report.

An acquisition could have given Chime an additional vertical and expanded customer base, as debit card swipe fees currently contribute most of its revenue, while DailyPay’s focus is on-demand pay, the report said.

The failure to make a deal points to the broader challenges facing tech companies in the current environment, including an economic downturn, a drop in tech company valuations, greater difficulty accessing finance and general uncertainty, per the report.

In this environment, both companies have recently reduced their workforces, with Chime cutting 12% of its staff in November and DailyPay laying off 10% of its employees in August, according to the report.

As PYMNTS reported, Chime said Nov. 2 it made its job cuts to ensure the long-term success of the company.

“As a result, we are eliminating some positions, while still hiring for select others,” a Chime spokesperson told PYMNTS at the time. “We remain very well capitalized, and these steps will continue to position us for sustained success.”

Some DailyPay employees, concerned that the company might have to raise funds in this difficult environment, favored accepting a Chime offer, The Information’s report stated.

Chime and DailyPay spokespersons each told PYMNTS that their company had no comment on the report.

Chime began the year preparing for an initial public offering (IPO) that would have reportedly valued it at nearly $40 billion. It had previously been valued at $25 billion in a $750 million funding round in August 2021. However, Chime decided in February to put its IPO on hold.

DailyPay launched in September a general purpose reloadable (GPR) prepaid card and app called Friday that enables employees to receive instant, no-fee, on-demand pay transfers from employers who use the company’s on-demand pay platform.

Beyond that, the Friday app enables users to view and access their earned pay before payday, add the card to a mobile wallet, make purchases, manage their money and track their spending.