Perseus Mlambo’s Union54, the product of a series of pivots, proved to be a high-flying success story in African fintech until it was struck by a setback in 2022, notably the much-publicised USD 1.2 B attempted chargeback fraud turmoil.
Union54, the first Zambian Y Combinator-backed startup, raised over USD 15 M from global investors, including Tiger Global, and was an official Mastercard issuer. At its peak, the startup was a vital partner for the virtual debit card offerings of dozens of fintech companies, plugging into its API to issue millions of cards.
But as chargeback issues began to get out of hand, Mlambo and the team made the tough call to halt Union54 and rethink its strategy.
And thus comes the latest pivot, interestingly the third in the journey: The company began as Zazu, an agritech startup, before pivoting to a neobank, and then it became Union54, a card-issuing API, after spotting demand from other fintechs for virtual cards.
Following strong traction truncated by fraud-related challenges, an effort at a do-over has birthed an ambitious new product, ChitChat, first announced last July.
ChitChat: Talking Money
It’s a platform that couples social with payments, enabling users to chat on an encrypted platform and also send money to each other instantly in multiple currencies, get a USD debit card and make online payments. ChitChat will also eventually roll out digital storefronts on the app, WT gathered, tapping into Africa’s booming social commerce segment.
Some are calling it “WeChat for Africa,” likening it to the prominent Chinese super-app, though Founder/CEO Mlambo is wary of the super-app label.
“We don't really like to think of ourselves as a super-app. I think it reduces us to a trope, but what we're trying to do is to develop these two fundamental solutions, messaging and financial services,” he said in an extensive interview with WT.
“There are several messaging apps. There are several remittance companies. There are several card issuers. But there are very few who exist on one platform and ChitChat is one of the first. You can send a message, you can send money in a message, you can send USD, you can send USD to a bank, you can send USD to mobile money, you can send it to a cash agent in India, in China in the UK. And you can get a card that you can use on the internet,” Mlambo emphasised, demonstrating several such transactions over a video call.
