Fintech
Digital Bank Chime Acquires Salt Labs in New Strategic Offering to Sell to Employers
Chime is acquiring Salt Labs to expand its reach and begin selling directly to employers.
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Doorbell, the largest digital bank in the United States offering services ranging from free checking accounts to secured credit cards, has acquired Salt Labs, a two-year-old fintech startup. Salt awards loyalty points to hourly employees (separate from the pay they receive from their employer) for the shifts they work. Those Salt points can eventually be exchanged for rewards like NASCAR tickets, travel and financial investments. Employers pay for the service as a way to improve retention of high-turnover hourly workers and promote “financial wellness” for employees.
Chime paid $14 million in cash plus 0.9% of its equity for the New York startup, according to a person familiar with the deal. He is hiring most of Salt Lab’s 30 employees, including co-founder and CEO Jason Lee, who previously co-founded DailyPay. DailyPay allows workers to access their pay immediately after a shift and sells its services directly to employers. Fortune reported for the first time the news of the acquisition of Salt Labs.
Lee and his Salt Labs team must hit multi-year performance goals for Salt Labs shareholders to earn 0.9% in Chime stock. While Chime’s rating is much debatedif you value the private company at $8 billion, as we did in our recent Carillon profileThe 0.9% stake means a payment of $72 million on top of the $14 million in cash.
Salt Labs launched a year ago and six months later he told us (in his Forbes article Fintech50 application) that had five corporate clients, including Nashville-based Parking Management Company. It has raised $18 million in funding, most recently at an $80 million valuation.
The acquisition marks a new strategic beachhead for Chime: It is now looking to sell to employers, who will eventually be able to offer Chime’s broader range of banking services to their employees. But the intended individual users align with Chime’s moderate-income customer base.
Salt Labs CEO Jason Lee will become Chime’s chief business officer. His employer relationships and experience building DailyPay, as well as Salt Labs’ core product, were key drivers behind the purchase, according to Chime COO Mark Troughton.
It’s another way for Chime to advance its long-standing end goal to get customers to use Chime as their primary bank account and have their payments 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 bank charter, it partners with traditional banks like Bancorp to offer banking services.
The sale also represents a quick exit for Jason Lee, a former Goldman Sachs executive who tried to sell DailyPay to Chime in 2022 for $2 billion. After DailyPay’s board rejected the deal, Lee was fired and subsequently sold his DailyPay shares, according to a person familiar with the matter. In his new role in Chime, Lee will now compete directly with his own creation.