Chime, the largest digital bank in the U.S. that offers services ranging from free checking accounts to secured credit cards, has acquired Salt Labs, a two-year-old fintech startup. Salt awards hourly employees loyalty points (separate from the pay they receive from their employer) for the shifts they work. Those Salt points can eventually be exchanged for rewards such as NASCAR tickets, trips 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. It is hiring most of Salt Lab’s 30 employees, including cofounder and CEO Jason Lee, who previously cofounded DailyPay. DailyPay lets workers access their wages shortly after a shift and sells its services directly to employers. Fortune first reported the news of the Salt Labs acquisition.
Lee and his Salt Labs team need to hit multi-year performance targets for Salt Labs’ shareholders to earn the 0.9% in Chime stock. While Chime’s valuation is hotly debated, if you value the private company at $8 billion, as we did in our recent Chime profile, the 0.9% stake means a $72 million payout on top of the $14 million in cash.
Salt Labs launched a year ago, and six months later it told us (in its Forbes Fintech 50 application) that it had five corporate customers, 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’s now trying to sell to employers, who will ultimately be able to offer Chime’s broader set of banking services to their employees. But the intended individual users line up with Chime’s core moderate-income customer base.
Salt Labs CEO Jason Lee will become head of enterprise at Chime. His relationships with employers and experience building DailyPay–in addition to Salt Labs’ core product–were key drivers behind the purchase, according to Chime chief operating officer Mark Troughton.
It’s yet another way for Chime to advance its long-standing end goal of getting customers to use Chime as their primary bank account and to have their pay directly deposited to the digital bank. Chime makes most of its money off the fees merchants pay when its users swipe their cards for purchases. Since Chime doesn’t have a bank charter, it partners with traditional banks like Bancorp to offer banking services.
The sale also represents a fast 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 he subsequently sold his DailyPay stock, according to a person familiar with the matter. In his new role at Chime, Lee will now be competing directly with his own creation.
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