Chipper Cash, the African fintech giant backed by FTX and Silicon Valley Bank (SVB), is reportedly considering selling the business or bringing in new investors, according to a Bloomberg report citing anonymous sources. The company had already been exploring its options before SVB’s sudden shutdown in February 2023, but has yet to reach a final decision.
Chipper Cash raised $150m in a Series C extension in 2021 led by FTX, following the first Series C led by SVB. Ribbit Capital, Deciens Capital, One Way Ventures, Bezos Expeditions and Tribe Capital also participated in the funding round. However, in 2022, the company faced significant headwinds following FTX’s collapse, which saw its $2bn valuation drop to $1.25bn by the end of the year. Costs rose and the company cut staff.
Speculation mounted that Chipper Cash, an SVB client, would be hit hard by the bank’s collapse, however, the company has reportedly said that it had insignificant exposure to both SVB and Signature Bank. CEO Ham Serunjogi noted in a 12 March statement that the company has never sought to be acquired despite receiving M&A proposals from different parties. He added that Chipper Cash had only around $1m held with SVB when the bank shut down.
Chipper Cash is one of Africa’s top fintech companies and aims to connect African countries to make sending and receiving money more affordable and easier. Chipper Cash raised $100m in a Series B funding round in June 2021, which brought the company’s total funding to $205m. The start-up has a presence in seven African countries including Nigeria, Kenya, Uganda, Tanzania, Ghana, Rwanda and South Africa. Since launching in 2018, Chipper Cash has expanded to serve over four million users on its platform, according to the Bloomberg report.
Despite the potential sale, Chipper Cash remains committed to expanding its platform’s reach in Africa. In an interview with CNBC in January, Serunjogi said the company was seeking to gear up services for a broader range of customers, including small-scale merchants and farmers, and would also be looking to expand into new territories.
Chipper Cash’s services aim to solve a recurring problem on the African continent where many residents do not have bank accounts. The fintech disrupts the archaic banking system in Africa by allowing users to send money between African countries easier and at a lower cost. With its growing popularity in the fintech sector, it has become a favourite with venture capitalists looking to make gains in the fast-growing African market.
In conclusion, Chipper Cash is weighing the possibility of selling the business or bringing on board new investors. The news comes after the fintech giant experienced a difficult year with FTX’s collapse and rising costs leading to a drop in the company’s valuation. However, despite the turmoil, Chipper Cash remains committed to its primary mission of expanding financial inclusion on the African continent.
