Things appear to be heading south for Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled (two college students brought together by their academic adventures at Grinnell College, Iowa, USA.) At a time when the 5-year-old payment startup should be gearing up for a big exit, it appears to have just begun life anew.
In November 2021, Chipper Cash, which processes cross-border payments for customers, announced a $150 million Series C expansion round led by FTX, a cryptocurrency exchange platform created by Sam Bankman-Fried. The investment came only six months after it received a $100 million Series C funding from SVB Capital, Silicon Valley Bank Financial Group’s corporate venture capital arm.
Now, both the FTX and SVB Financial Group have declared bankruptcy, thus ending their several years of business. And, of course, liquidating their assets, which include investments in tech startups such as Chipper Cash.
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Two of the investment rounds for Chipper Cash included participation from SVB Capital as well as prior investors Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures, and Tribe Capital, raising the company’s worth to over $1 billion.
Chipper Cash, founded in 2018, offers free, interoperable payments in and across various African nations, most notably Ghana, Kenya, Uganda, Tanzania, South Africa, Rwanda, and Nigeria; however the firm also has operations outside of Africa, including the United Kingdom.
For his part, Sam Bankman-Fried, the then CEO of FTX, claimed the investment in Chipper Cash was made with the intention of “making money transfer as simple as sending a text message and accelerating the adoption of cryptocurrencies throughout Africa and beyond.” Yet in light of FTX’s drowning, that objective suddenly also seems too flimsy. Chipper Cash recently denied reports that it had shut down its crypto department.
The US Federal Deposit Insurance Corporation (FDIC) has since been appointed as receiver and will be in charge of liquidating the assets of the Silicon Valley Financial Group Bank. This is the first FDIC-insured bank to shut this year, with Almena State Bank in Kansas closing on October 23, 2020.
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Several tech employees whose salaries were dependent on SVB Financial Group Bank were concerned by the announcement. Chipper Cash just completed a second round of layoffs, barely 10 weeks after laying off around 12.5% of its workers (affecting its engineering team the most). The company’s vice president of revenue announced the news on LinkedIn, stating that “all sectors” of Chipper Cash’s marketplaces were affected this time. Numerous local news agencies reported that Chipper Cash laid off about one-third of its workers, or roughly 100 people in the latest round of retrenchment.
The FDIC has assured that all Silicon Valley Bank locations will reopen on March 13, and all insured depositors will have complete access to their insured savings by Monday morning.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard