Chipper Cash Reportedly Open To Being Acquired In Bumpy Period

By  |  March 14, 2023

African fintech unicorn, Chipper Cash, is exploring a number of options, including the possibility of being snapped up in an acquisition, Bloomberg reports citing people familiar with the matter.

Chipper Cash—which since its founding in 2018 by two former Silicon Valley tech professionals: Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled, has established itself as a prominent player in payments—is understood to be open to a sale among other options.

Although the startup has faced some turbulence of late with the most recent being the implosion of its banking partner Silicon Valley Bank (SVB), the sources maintain that the company had been weighing its options before last week’s crisis. However, no concrete steps have been taken as of yet and it’s possible that they may decide against the options being explored, according to the sources.

“It’s been fairly common practice for us to receive various M&A proposals from different parties, which we evaluate to varying degrees,” the company said in response to Bloomberg. “That being said, we have never sought to be acquired.”

SVB, which has been in the news since last week as its rapid demise unfolded, led a USD 100 M Series C investment in Chipper Cash in May 2021. The fintech company would announce a USD 150 M extension just six months later doubling its valuation to USD 2.2 B, making it one of the most funded and most valuable African startups, as well as one of the quickest to hit unicorn status.

Chipper Cash said at the time that it was averaging 40 percent month-on-month growth and had acquired over 5 million users. The startup appeared to be on a growth tear having processed USD 1.65 B in total payment volume and earned gross revenue of USD 169 M in Q1 2022 while operating in 7 African markets.

The tech downturn has however put Chipper in the path of headwinds, culminating in a downsizing exercise that saw the startup terminate a reported 150 workers in a series of layoffs.

Chipper also found itself in the crosshairs following the collapse of one of the world’s largest crypto exchanges, FTX, which was one of its backers. There have been reports that Chipper is exploring fundraising opportunities after seeing its valuation take a significant cut in the midst of the difficult tech climate.

Chipper Cash is also a client of SVB, which before its crash was the favourite bank of companies and investors in the tech industry with clients spanning the West and many other parts of the world. African tech companies have attracted substantial capital from the U.S. in recent years, and SVB provided banking services to a number of them. Its collapse means startups have to quickly look elsewhere for global banking services that tend to prove difficult for businesses operating out of Africa.

“While this is a very worrying time for so many tech firms, the impact of SVB’s collapse on Chipper is insignificant,” Chipper CEO Serunjogi told WT in a statement.

Chipper has shared that its exposure to the SVB crash is limited to USD 1 M as it maintains multiple banking relationships in the U.S., adding that its global customer operations won’t be impacted. 

In a whirlwind week that also saw two other U.S. banks fall apart, the SVB crash caused tremendous panic in the tech landscape as billions of dollars in deposits belonging to thousands of businesses were in jeopardy. But fears have been allayed somewhat after U.S federal banking officials announced late Sunday that SVB’s deposits would be fully insured.

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