Chipper Cash's valuation dropped by 37.5%

In November 2021, an African fintech company, Chipper Cash raised $150 million in a Series C extension round led by Sam Bankman-Fried's cryptocurrency exchange platform, FTX.

This $150 million investment came six months after the company closed its first Series C round of $100 million, led by SVB Capital, the corporate venture capital arm of SVB Financial Group, raised Chipper Cash's valuation above $2 billion—making it the seventh African unicorn.

However, documents shared by Financial Times on Tuesday (December 6, 2022) revealed that Chipper Cash's valuation was slashed by 37.5%—from $2 billion to $1.25 billion before FTX's bankruptcy.

Chipper Cash is at S/N 31. Credit: FT

According to the documents, FTX via Alameda Research invested an additional $35 million (in SAFE) into Chipper Cash, this unannounced investment was made at a $1.25 billion valuation—the date for this investment was not disclosed.

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Per Financial Times, Chipper Cash and other companies on the list were offered by FTX as collateral when it planned to get fresh funding to prevent it from bankruptcy.

Layoffs at Chipper Cash

Yesterday (December 7, 2022), some employees at the company announced on LinkedIn that they were laid off. "This morning a significant amount of Chipper staff were let go in a layoff. While I was not among them, many of my close colleagues and friends were," Erin Fusaro, the VP of Engineering at Chipper Cash, posted on LinkedIn. Over 50 employees were affected across different departments.

Founded in 2018 by Ham Serunjogi and Maijid Moujaled, Chipper Cash offers a no-fee peer-to-peer cross-border payment service in Africa via its app. Its services are used across seven African countries—Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.

Last year, the company expanded to UK, to enable people to send money from the European nation to Chipper Cash's African markets— and the US—to facilitate peer-to-peer money movement from the US. to Nigeria and Uganda. Chipper Cash reportedly has over 5 million users across these markets.

Just last month, the company disclosed that it intends to make its "first major acquisition" by acquiring Zambian fintech company, Zoona, to enable its expansion into the Southern African country.

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The Central Bank of Kenya (CBK) in July 2022 said that Chipper Cash and Flutterwave are not licensed to operate in Kenya. CBK instructed CEOs of financial institutions in Kenya to "cease and desist from dealing with Flutterwave and Chipper Cash".

Other FTX's investments in Africa

In BD Insider, Letter 138, we covered some African companies that the FTX Group has invested in. This was after Nigeria-based Web3 startup, Nestcoin disclosed that it was affected by FTX's liquidity crises. We covered Ovex, Nestcoin, Chipper Cash, Mara and Jambo.

This latest document from FT revealed more details about FTX's investment in the companies mentioned above and other African companies—Wave, AZA Finance, VALR and Bitnob—that did not appear in our initial report.

OVEX: FTX invested $5 million into Ovex, a South African digital asset exchange and OTC trading desk, at a $122 million valuation. Ovex tagged this investment which was made in January 2021 via Alameda Research as a "strategic investment".
Nestcoin: According to the documents, FTX invested $250,000 in equity funding into Nestcoin, a Nigerian web3 platform whose assets got stuck on the bankrupt exchange, at a $30 million valuation.
Jambo: FTX invested $500,000 into the Congolese-based Web3 startup. Recall that in February 2022, Jambo raised $7.5 million in seed funding from Alameda Research and other investors including Coinbase Ventures and Tiger Global.
AZA Finance: This Kenya-based payment automation and settlement company received a $25 million promissory note and loan from FTX.
Wave: FTX invested $10 million in equity into Wave, an African mobile money platform.
VALR: FTX has also made a $4 million equity investment into VALR, a South African crypto exchange platform.
Bitnob: This Nigerian crypto exchange startup has also received $500,000 from FTX at a $20 million valuation.