Africa-focused fintech Chipper Cash considers potential business sale – fintech

One of Africa’s fintech giants, Chipper Cash, is said to be considering the possibility of selling the company or attracting new investors. According to the CEO of the fintech startup backed by FTX and Silicon Valley Bank, Chipper Cash had minor exposures to both SVB and Signature Bank.

Chipper Cash “should never be purchased”

FTX and Silicon Valley Bank (SVB)-backed African fintech giant Chipper Cash is considering options such as selling the company or attracting new investors, according to a Bloomberg report citing unnamed sources. According to the report, the fintech, which began evaluating its options before SVB’s abrupt collapse, is yet to make a final decision on which course of action it will take.

As already at the end of 2021 by Bitcoin.com News reports, Chipper Cash has successfully raised $150 million in a Series C expansion led by now-defunct crypto exchange FTX. SVB, which led the first Series C, also participated in the round, as did Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures and Tribe Capital.

However, after a turbulent 2022 culminating in the collapse of FTX, Chipper Cash’s valuation fell from $2 billion in the fourth quarter (Q4) of 2022 to $1.25 billion by December 2022. Chipper Cash also reduced its workforce in the face of rising costs.

Insignificant exposure to SCC

Meanwhile, the closure of SVB by US authorities is said to have fueled speculation that Chipper Cash – a customer of SVB – would be badly hit by the bank’s demise. However, in a statement sent to Bloomberg, Chipper Cash insisted the owners had never considered selling the company.

“It is quite common that we receive different M&A proposals from different parties, which we evaluate to different degrees. That being said, we’ve never attempted to be acquired,” the fintech reportedly said.

In his March 12 message to stakeholders, Chipper Cash co-founder and CEO Ham Serunjogi claimed that the fintech unicorn had insignificant exposure to both SVB and Signature Bank. At the time of SVB’s collapse, Chipper Cash had about $1 million on deposit with the bank.

Serunjogi also tried to downplay SVB’s perceived influence on the fintech by pointing to the collapsed bank’s stake in Chipper Cash.

“SVB wasn’t the only investor in this round – we had several other new and existing investors participating in the $100 million round – and SVB owns a very small portion of Chipper, ~2%. Chipper is very fortunate to have a very broad and supportive investor base that has supported us from the beginning and continues to do so today,” said the CEO.

Sign up your email address here to receive weekly African news update in your inbox:

What do you think of this story? Let us know what you think in the comment section below.

Terence Zimwara

Terence Zimwara is an award-winning Zimbabwean journalist, author and writer. He has written extensively on the economic woes of some African countries, as well as how digital currencies can provide an escape route for Africans.

photo credit: Shutterstock, Pixabay, WikiCommons