Chipper Cash Valued at $2.2 Billion After $100M SVB Investment

Fintech Growth in Africa: A Lucrative Landscape

The African fintech sector presents a significant opportunity for investment. Investors are demonstrating strong confidence in startups delivering a wide range of services, including payment solutions, lending platforms, neobanks, remittance services, and cross-border money transfers – and with good reason.

Chipper Cash Secures $100 Million Series C Funding

Chipper Cash, a fintech company specializing in cross-border payments within Africa, has successfully completed a $100 million Series C funding round. This capital injection will be used to introduce new products and expand the company’s team.

Rapid Funding Trajectory

This latest funding follows closely on the heels of previous investments. In November 2020, Chipper Cash secured $30 million in Series B funding, spearheaded by Ribbit Capital and Bezos Expeditions. Prior to that, a $13.8 million Series A round was closed with Deciens Capital and other investors in June 2020.

Consequently, Chipper Cash has secured three funding rounds totaling $143.8 million within a single year. Including earlier seed funding rounds of $8.4 million raised in 2019, the total investment received by the company reaches $152.2 million.

Investment Details and Participants

SVB Capital, the investment division of Silicon Valley Bank, led the Series C funding round. Existing investors, including Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures, 500 Startups, Tribe Capital, and Brue2 Ventures, also participated in this round.

Founding and Early Development

Chipper Cash was established in 2018 by Ham Serunjogi and Maijid Moujaled. The founders initially connected while studying in Iowa, USA. After gaining experience at prominent companies such as Facebook, Flickr, and Yahoo, they decided to pursue their entrepreneurial vision.

Expansion and User Growth

Last year, the company’s mobile-based, no-fee P2P payment services were available in seven African countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa, and Kenya. The company has now extended its reach beyond Africa, with expansion into the United Kingdom. “We’ve expanded to the U.K., it’s the first market we’ve expanded to outside Africa,” stated CEO Serunjogi.

Chipper Cash currently employs over 200 individuals and plans to add another 100 staff members throughout the year. The user base has grown to 4 million, representing a 33% increase year-over-year.

While the company processed approximately 80,000 transactions daily in November 2020 and $100 million in payment value in June 2020, current figures remain undisclosed as Serunjogi declined to provide further details, including revenue information.

New Product Launches

Previously, Chipper Cash expressed intentions to introduce business payment solutions, cryptocurrency trading options, and investment services. Progress has been made on these fronts. “We’ve launched cards products in Nigeria and we’ve also launched our crypto product. We’re also launching our U.S. stocks product in Uganda, Nigeria and a few other countries soon,” Serunjogi explained.

The Rise of Cryptocurrency in Africa

Cryptocurrency adoption is gaining momentum across Africa. African users contribute significantly to transaction volumes on global crypto-trading platforms. For example, African users accounted for $7 billion of Luno’s $8.3 billion total trading volume.

Binance P2P users in Africa have experienced a 2,000% growth in the past five months, with transaction volumes increasing by over 380%. Nigeria, South Africa, and Kenya are key drivers of crypto activity on the continent.

Given its presence in these markets, capitalizing on the growing crypto opportunity is a logical step for Chipper Cash. “Our approach to growing products and adding products is based on what our users find valuable. As you can imagine, crypto is one technology that has been widely adopted in Africa and many emerging markets. So we want to give them the power to access crypto and to be able to buy, hold and sell crypto whenever,” the CEO added.

Navigating Regulatory Challenges

However, the company’s crypto service is currently unavailable in Nigeria, the largest crypto market in Africa. This is due to regulations imposed by the Central Bank of Nigeria (CBN), which prohibit users from converting fiat currency into crypto through their bank accounts.

Chipper Cash is not currently offering P2P methods to circumvent these restrictions, but Serunjogi indicated the company is “looking forward to any development in Nigeria that allows it to be offered freely again.”

Similarly, the planned rollout of investment services in Nigeria and Uganda is subject to regulatory considerations. Nigeria’s Securities and Exchange Commission (SEC) is actively overseeing local investment platforms. Chipper Cash is proactively engaging with regulators to ensure compliance.

Prioritizing Compliance and Consumer Protection

“As fintech explodes and as innovation continues to move forward, consumers have to be protected. We invest millions of dollars every year in our compliance programs, so I think working closely with the regulators directly so that these products are offered in a compliant manner is important,” Serunjogi emphasized.

Six Billion-Dollar Companies in Africa: Could Chipper Cash Be the Fifth Fintech Unicorn?

During a recent discussion, Serunjogi shared perspectives on Nigeria’s central bank, echoing similar statements made by Flutterwave CEO Olugbenga Agboola earlier in March.

He acknowledged the supportive environments fostered by central banks in Kenya, Rwanda, and Uganda. However, he also stated: “Nigeria possesses arguably the most dynamic and thriving technology ecosystem in Africa, a direct result of the CBN’s efforts in cultivating an atmosphere conducive to the growth of numerous startups, including ourselves and Flutterwave.”

Many fintech companies contend that the CBN hinders innovation. Yet, comments from both CEOs suggest a different perspective. Chipper Cash and Flutterwave appear to prioritize alignment with the policies and regulations of Nigeria’s central bank.

This strategic approach has contributed to their rapid expansion and status as billion-dollar companies. “We are not disclosing our valuation,” Serunjogi clarified, “but after this funding round, we are likely the most highly valued private startup in Africa.

This reflects the favorable conditions created by regulators like the CBN, which have enabled both innovation and growth.”

Until recently, Flutterwave was the sole private unicorn startup in Africa this year. Subsequently, OPay, a China-backed, African-focused fintech, emerged as it reportedly secured $400 million in funding with a $1.5 billion valuation.

Based on Serunjogi’s remarks, Chipper Cash’s valuation may currently fall between $1 billion and $2 billion, potentially adding it to the exclusive group of billion-dollar companies.

I directly inquired with Serunjogi about whether the company had indeed achieved unicorn status. His response was more reserved. “We are not publicly commenting on the specifics of our valuation.

Internally and externally, we have intentionally focused on the impact of our product on users, rather than pursuing a valuation goal.”

Serunjogi emphasized that this investment underscores the importance of a robust balance sheet. Onboarding SVB Capital and securing increased investment from existing stakeholders are key to achieving this.

He explained that a strong financial foundation will provide the necessary resources for crucial long-term investments, ultimately leading to the development of more innovative products. “We view our investors as integral partners in our business.

Their capital support, combined with the valuable insights we gain from them, strengthens our company,” he stated regarding the investors supporting the three-year-old firm.

Similar to Ribbit Capital and Bezos Expeditions in the previous year’s Series B round, this marks SVB Capital’s initial investment in the African market. Tilli Bannett, managing director of SVB Capital, confirmed the fund’s investment in Chipper Cash via email.

She noted that the firm invested in Chipper Cash due to its success in creating a simple and accessible financial solution for individuals in Africa, enhancing both products and user experience. “Chipper has demonstrated remarkable growth in user adoption and transaction volume.

We are enthusiastic about its role in promoting financial inclusion across Africa and the significant potential that remains,” she added.

Fintech continues to be a leading sector for investment in African tech. In 2020, it represented over 25% of the nearly $1.5 billion raised by African startups.

This proportion is expected to rise this year, with four startups already securing $100 million rounds: TymeBank in February, Flutterwave in March, and OPay and Chipper Cash in May.

Correction: This article has been updated to reflect that Chipper Cash is not currently a unicorn, following a review of the facts.