- Key insight: Current, a digital banking fintech competing with Chime, recently raised $80 million in a Series E funding round.
- Forward look: Current expects to hit profitability sometime this year.
- Expert quote: "Neobanks like Current and Chime have lower break-even points relative to traditional financial institutions by keeping overhead costs low." —Javelin analyst Dylan Lerner
Challenger bank Current has raised $80 million in its first formal funding round since 2021.
The neobank, which operates a digital banking app competing with fintechs like Chime, Varo and Greenlight, announced that its company valuation is now $1.5 billion. The Series E funding round was led by Springcoast Partners.
The updated valuation reflects a decrease of 38% from its 2021 valuation peak of $2.2 billion after a
Current is entering its third consecutive year of growth, according to a company statement, and claims to be advancing toward profitability in 2026 as it prepares to go public in the future.
"Over the last several years we've focused relentlessly on building products that solve real financial problems for everyday Americans," said Current CEO Stuart Sopp. "This investment reflects confidence in the strength of our business, our progress toward public market readiness, and the value we're creating for millions of members."
Dylan Lerner, senior digital banking analyst for Javelin Strategy and Research, told American Banker that spend-based business models based on interchange fees, such as Current's, aren't typically profitable on their own but can be when paired alongside other measures.
"For an interchange model to be profitable, you really need to tip the scales between revenue and costs," he said. "To increase revenue, you need to take full advantage of interchange fees both by volume and yield. It's also common for neobanks to explore revenue streams outside of interchange, typically by diversifying their offerings with other banking products and services."
Lerner said that a key profitability metric for neobanks like Current is average revenue per user, or ARPU.
"Like many neobanks, Current has had some trouble with inactive accounts," he said. "Such accounts incur maintenance and compliance costs without earning any interchange. Current added inactivity and escheatment fees back in 2023, perhaps to combat this and recoup some of the costs. It's also possible that Current has reached some sort of level of maturity where they have built stronger connections with a more profitable base."
According to the company, Current has
The company also attributed its recent growth to investments in technology and AI infrastructure. For example, Current has its own banking core (similar to
"By design, neobanks like Current and Chime have lower break-even points relative to traditional financial institutions by keeping overhead costs low by forgoing branches and maintaining relatively light staffing," Lerner said. "Chime and Current share similar playbooks, although Chime has a much larger base and has purportedly already achieved profitability. I can see these converging as both continue down their paths to profitability. Chime is already extending into lending, and Current seems to be doubling down on its current base."
The new capital will support continued investment in product innovation, AI-powered financial services, and the expansion of Current's banking, payments, liquidity and credit offerings, according to a company statement.
"Current appears to be actively employing or pursuing these strategies to move beyond pure interchange," Lerner said. "Interchange is often viewed not as the primary business model, but just the easiest entry point."
