Africa has another unicorn as Chipper Cash raises $100M Series C led by SVB Capital

Fintech in Africa is a goldmine. Investors are betting mountainous on startups offering a plethora of products and services from funds and lending to neobanks, remittances and imperfect-border transfers, and rightfully so. Every of these products and services solves odd sets of challenges. For imperfect-border funds, it’s the unfriendly rates and regulatory hassles concerned with finishing transactions from one African nation to another.

Chipper Cash, a 3-yr-outdated-fashioned startup that facilitates imperfect-border fee all the strategy thru Africa, has closed a $100 million Series C spherical to introduce more merchandise and grow its crew.

It hasn’t been too long ago since Chipper Cash was last within the info. In November 2020, the African imperfect-border fintech startup raised $30 million Series B led by Ribbit Capital and Jeff Bezos fund Bezos Expeditions. This was after closing a $13.8 million Series A spherical from Deciens Capital and other traders in June 2020. Due to this reality, Chipper Cash has gone thru three rounds totalling $143.8 million in a yr. Nonetheless, when the $8.4 million raised in two seed rounds assist in 2019 is integrated, this number increases to $152.2 million.

SVB Capital, the investment arm of U.S. excessive-tech business financial institution Silicon Valley Financial institution led this Series C spherical. Others who participated on this spherical comprise existing traders — Deciens Capital, Ribbit Capital, Bezos Expeditions, One Manner Ventures, 500 Startups, Tribe Capital, and Brue2 Ventures. 

Chipper Cash was launched in 2018 by Ham Serunjogi and Maijid Moujaled. The pair met in Iowa after coming to the U.S. for be taught. Following their stints at mountainous names recognize Fb, Flickr and Yahoo!, the founders determined to work on their very possess startup.

Last yr, the company which affords cell-based, no fee, P2P fee products and services, was showcase in seven international locations: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya. Now, it has expanded to a brand fresh territory outdoor Africa. “We’ve expanded to the U.Okay., it’s the first market we’ve expanded to outdoor Africa,” CEO Serunjogi said to TechCrunch.

Besides and as a impress of progress, the company which boasts larger than 200 employees plans to increase its group of workers by hiring 100 team within the future of the yr. The desire of users on Chipper Cash has increased to 4 million, up 33% from last yr. And while the company averaged 80,000 transactions day by day in November 2020 and processed $100 million in funds worth in June 2020, it’s miles unclear what these figures are now as Serunjogi declined to comment on them, including its revenues.

When we reported its Series B last yr, Chipper Cash desired to provide more business fee solutions, cryptocurrency procuring and selling choices, and investment products and services. So what has been the progress since then? “We’ve launched cards merchandise in Nigeria and we’ve also launched our crypto product. We’re also launching our US shares product in Uganda, Nigeria and any other international locations soon,” Serunjogi answered.

Crypto is broadly adopted in Africa. African users are responsible for a sizeable chunk of transactions that happen on some international crypto-procuring and selling platforms. As an instance, African users accounted for $7 billion of the $8.3 billion in Luno’s complete procuring and selling quantity. Binance P2P users in Africa also grew 2,000% within the future of the past 5 months whereas their volumes increased by over 380%.

People and small companies all the strategy thru Nigeria, South Africa and Kenya anecdote for many of the crypto affirm on the continent. Chipper Cash is active in these international locations and tapping into this probability is basically a no brainer. “Our system to increasing merchandise and adding merchandise is based on what our users procure primary. As it’s doubtless you’ll well factor in, crypto is one technology that has been broadly adopted in Africa and heaps of emerging markets. So we’re looking out to provide them the energy to access crypto and so as to purchase, preserve, and promote crypto whenever,” the CEO added.

Nonetheless, its crypto service isn’t available in Nigeria, the most interesting crypto market in Africa. The reason within the assist of this is the Central Financial institution of Nigeria’s (CBN) regulation on crypto actions within the nation prohibiting users from converting fiat into crypto from their financial institution accounts. To continue to exist, most crypto avid gamers comprise adopted P2P suggestions but Chipper Cash isn’t offering that but and in accordance with Serunjogi, the company is “waiting for any constructing in Nigeria that permits it to be supplied freely another time.”

The identical goes for the investment service Chipper Cash plans to roll out in Nigeria and Uganda soon. Currently, Nigeria’s capital market regulator SEC is maintaining tabs on native investment platforms and bringing their actions below its purview. Chipper Cash will no longer be exempt when the product is live in Nigeria and has begun participating regulators to be sooner than the curve.

“As fintech explodes and as innovation continues to switch forward, buyers have to be protected. We make investments thousands and thousands of bucks yearly in our compliance programs, so I judge working carefully with the regulators at once so that these merchandise are supplied in a compliant system is serious,” Serunjogi effectively-known. 

Six billion-buck companies in Africa; the fifth fintech unicorn

Trusty thru our name, Serunjogi made some remarks about Nigeria’s central financial institution which resembles feedback made by Flutterwave CEO Olugbenga Agboola assist in March.

Whereas acknowledging the central banks in Kenya, Rwanda, Uganda for constructing environments where innovation can thrive, he said: “Nigeria has potentially the most thrilling and shiny tech ecosystem in Africa. And that’s credit rating at once to CBN for constructing and fostering an environment that allowed more than one startups recognize ourselves and others recognize Flutterwave to blossom.”  

Most fintechs would argue that the CBN stifles innovation but feedback from each and every CEOs looks to suggest in another case. From all indication, Chipper Cash and Flutterwave strive to be on the simply facet of the nation’s apex financial institution insurance policies and laws. It’s why they’re really apt one of the most fastest-increasing fintechs within the whisper and likewise billion-buck companies.

“Clearly, we’re no longer stepping into our valuation, but we’re potentially the most dear internal most startup in Africa as of late after this spherical. So that’s a reflection of the atmosphere that regulators recognize CBN comprise created to allowed innovation and progress, ” Serunjogi commented when asked about the company’s valuation.

Up till last week, the most interesting internal most unicorn startup in Africa this yr was Flutterwave. Then China-backed and African-centered fintech OPay came along as the company was reported to be within the strategy of elevating $400 million at a $1.5 billion valuation. If Serunjogi’s comment is anything else to head by, Chipper Cash is currently valued between $1-2 billion thus joining the irregular billion-buck club.

But to make sure, I asked Serunjogi another time if the company is indeed a unicorn. This time, he gave a more cryptic solution. “We’re no longer commenting on the scale of our valuation publicly. Some of the issues that I’ve been somewhat serious about internally and externally is that the valuation of our company has no longer been some degree of curiosity for us. It’s no longer a map we’re aspiring to form. For us, the component that drives us is that we now comprise a product that is impactful to our users.”

Serunjogi added that this investment actualizes the importance of possessing a stable balance sheet and onboarding SVB Capital and getting existing traders to double down is a technique to that cease. In accordance with him, a stable balance sheet will present the infrastructure wished to bolster key long-timeframe investments which will translate to more thrilling merchandise down the road.

“We watch at our traders as key companions to the business. So having very stable companions around the table makes us a stronger company. These are companions who can assign capital into our business, and we’re also in a quandary to learn from them in several other methods,” he said of the traders backing the three-yr-outdated-fashioned company.  

Factual recognize Ribbit Capital and Bezos Expeditions in last yr’s Series B, this is SVB Capital’s first foray into the African market. In an email, the managing director of SVB Capital Tilli Bannett, confirmed the fund’s investment in Chipper Cash. In accordance with him, the VC firm invested in Chipper Cash as a consequence of it has created an easy and accessible arrangement for folks living in Africa to fulfil their financial wants thru enhanced merchandise and shopper experiences.

“As a consequence, Chipper has had an magnificent trajectory of shopper adoption and quantity thru the product. We are indignant on the role Chipper has cast for itself in fostering financial inclusion all the strategy thru Africa and the vast doubtless that serene lies ahead,” he added.

Fintech stays the sexy space in African tech investment. In 2020, the sector accounted for larger than 25% of the practically $1.5 billion raised by African startups. This pick will likely increase this yr as four startups comprise raised $100 million rounds already: TymeBank in February, Flutterwave in March, OPay and Chipper Cash this Can also simply. All excluding TymeBank are now valued at over $1 billion, and it becomes the first time Africa has viewed two or more billion-buck companies in a yr. Besides to Jumia (e-commerce), Interswitch (fintech), and Fawry (fintech), the continent now has six billion-buck tech companies.

Right here’s another interesting fragment of knowledge. The timeframe at which startups are reaching this landmark looks to be shortening. Whereas it took Interswitch and Fawry seventeen and thirteen years respectively, it took Flutterwave 5 years; Jumia, four years; then OPay and Chipper Cash three years.