Chipper Cash Africa Raises $100 million From Foreign Investors

Fintech is the new oil in Africa as investors from all over the world are pouring in their funds into it as it promises extremely good returns for these investors.

Fintech in Africa offers an avalanche of services ranging from payments and lending to banks to cross-border transfers and remittances. For cross-border payments, it’s the extremely high rates and regulatory hassles involved with completing transactions from one African country to another.

Chipper Cash, an African Startup has risen up to the occasion by providing solutions to the continent’s nagging payment challenges.

The three year old startup recently closed a $100 million Series C to expand its operations across Africa as well as exponentially grow its team.

The ambitious startup has been in the news recently as it raised $30 million Series B led largely by Ribbit Capital and Jeff Bezos fund Bezos Expeditions in November 2020. This came after it closed $13.8 Series A round from Deciens Capital who led other investors in June 2020. In barely a year they have gone through three rounds up to the total of $143.8 million. If you add the $8.4 million raised in 2019, the total comes up to $152.2 million.

SVB Capital was the leader of the Series C round. Others who participated in this round include existing investors — Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures, 500 Startups, Tribe Capital, and Brue2 Ventures. 

Chipper Cash was founded in 2018 by Ham Serunjogi and Maijid Moujaled. The duo met in Iowa in the United States when they came for their studies. They had a combined work experience in big brands like Facebook, Yahoo and Flickr. They then decided to take the plunge by launching their own startup.

Last year, the company which offers mobile-based, no fee, P2P payment services, was present in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya. Now, it has expanded to a new territory outside Africa. “We’ve expanded to the U.K., it’s the first market we’ve expanded to outside Africa,” CEO Serunjogi said to TechCrunch.

In addition and as a sign of growth, the company which boasts more than 200 employees plans to increase its workforce by hiring 100 staff throughout the year. The number of users on Chipper Cash has increased to 4 million, up 33% from last year. And while the company averaged 80,000 transactions daily in November 2020 and processed $100 million in payments value in June 2020, it is unclear what those figures are now as Serunjogi declined to comment on them, including its revenues.

When we reported its Series B last year, Chipper Cash wanted to offer more business payment solutions, cryptocurrency trading options, and investment services. So what has been the progress since then? “We’ve launched cards products in Nigeria and we’ve also launched our crypto product. We’re also launching our US stocks product in Uganda, Nigeria and a few other countries soon,” Serunjogi answered.

Crypto Currency trading is extremely popular in Africa African users accounted for $7 billion of the $8.3 billion in Luno’s total trading volume. Binance P2P users in Africa also increased by 2,000% within the past five months while their volumes increased by over 380%.

Individuals and small businesses across Nigeria, South Africa and Kenya account for most of the crypto activity on the continent. Chipper Cash is active in these countries and tapping into this extremely gargantuan market is basically a no brainer. “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.

This crypto currency trading service is not present in Nigeria at the moment because of the ban on crypto currency trading by the Central Bank of Nigeria. o survive, most crypto players have adopted P2P methods but Chipper Cash isn’t offering that yet and according to Serunjogi, the company is “looking forward to any development in Nigeria that allows it to be offered freely again.”

The same is also applicable to the investment services that they plan to offer. Chipper Cash will not be exempt when the product is live in Nigeria and has begun engaging regulators to be ahead of the curve.

“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 noted. 

Chipper Cash is arguably Africa’s fifth fintech unicorn. While acknowledging the central banks in Kenya, Rwanda, Uganda for creating environments where innovation can thrive, he said: “Nigeria has probably the most exciting and vibrant tech ecosystem in Africa. And that’s credit directly to CBN for creating and fostering an environment that allowed multiple startups like ourselves and others like Flutterwave to blossom.”  

He added: “Obviously, we’re not getting into our valuation, but we’re probably the most valuable private startup in Africa today after this round. So that’s a reflection of the environment that regulators like CBN have created to allowed innovation and growth.”

Until recently, the only African fintech was Flutterwave which was co-founded by Iyinoluwa Aboyeji and its current CEO, Olugbenga Agboola. China backed and African focused Fintech broke the jinx when it got a $1.5 billion valuation and is in the process of raising $400 million. If Serunjogi’s comment is anything to go by, Chipper Cash might currently be valued between $1-2 billion thus joining the exclusive billion-dollar club.

But to be sure, I asked Serunjogi again if the company is indeed a unicorn. This time, he gave a more cryptic answer. “We’re not commenting on the size of our valuation publicly. One of the things that I’ve been quite keen on internally and externally is that the valuation of our company has not been a focus for us. It’s not a goal we’re aspiring to achieve. For us, the thing that drives us is that we have a product that is impactful to our users.”