Chipper Cash, a cross-border payments company in Africa, raised $150 million through a Series C extension round. Sam Bankman-Frieds, a cryptocurrency exchange platform FTX, led the round.
This investment comes just six months after Chipper Cash's first Series C round of $100,000,000, which was led by SVB Capital (the corporate venture capital arm) of SVB Financial Group.
SVB Capital was reinvested in the extension round along with other investors such as Deciens Capital and Ribbit Capital.
New investors participated but they are not being identified at this time. The total Series C funding for the company is more than $305 million.
TechCrunchs last conversation to CEO Ham Serunjogi when the company announced the Series C round, Chipper Cash was called the most valuable private start-up in Africa, without giving details on its actual value.
This statement was open to interpretation, and many debates have erupted since about whether Chipper Cash is a unicorn. Serunjogi is able to confirm that Chipper Cash has been valued slightly higher at $2 billion with this extension round.
In 2018, Serunjogi and Maijid Moujaled founded Chipper Cash to provide a peer-to-peer, cross-border payment service in Africa. The app is called Chipper Cash. Its services can be used in seven African countries: Kenya, Uganda, Nigeria and Tanzania.
The company made strides in the international market this year. It expanded to the U.K. in May to allow people to send money from Europe to African markets through Chipper Cashs.
Chipper Cash, a company with more than four million users, entered the U.S.-Africa corridor last month with established players like Wise MoneyGram, Sendwave, Sendwave, and Remitly. Nearly 30% of international remittances to sub Saharan Africa are made by the U.S.
Although margins for remittances may be small, the market has grown exponentially over the past decade. The exception to last year, when total remittances were $42 billion. This is down from $48 million in 2020.
It is very expensive to send money to subsaharan Africa. This is why Chipper Cashs is here to help you get money from Africa to the U.S.
Serunjogi said that Chipper Cash offers remittances at a much lower cost than any other company. Importantly, we are the first to send money to Africa from the U.S.
WorldRemit and other platforms allow certain African countries, such as South Africa, to send money to the U.S. so Chipper Cash isn't the only one to offer this service.
Serunjogi states that peer-to-peer cash movement from the U.S.A to Nigeria and Uganda is now available for those who are interested. Before the end of this year, the company will be able to offer the service in Ghana, South Africa, and Kenya.
The CEO stated that outflow payment services to send money from Africa to the U.S. will be available to users in Uganda, South Africa, and Kenya next year.
Chipper Cash also has been exploring the world of social payment. Twitter's Tips feature, also known by Tip Jar, was launched earlier this year to allow creators to get money through its platform. Twitter integrated with several payment platforms to make it available in different regions.
To receive tips from creators in developed countries, creators can choose to use PayPal, Patreon or GoFundMe to get tips. Chipper Cash is a payment link that allows African creators to access the services of Chipper Cash.
Serunjogi stated that the idea behind Twitter and ourselves was to provide multiple options for creators to receive payment for their work online.
Twitter also worked with us, given that we are the largest cross-border payment platform in Africa and could support multiple African countries using Twitter.
Serunjogi stated that Chipper Cash will make the Tip Jar integration available to users in the U.S. within the next year.
The partnership with Twitter, as well as the cross-border expansion into the U.S., shows the potential for growth for Chipper Cash. Funding from FTX makes this even more obvious.
FTX is the largest cryptocurrency derivatives trading platform in the world. The company raised $420 million in a round last month at a valuation of $25 billion.
Sam Bankman-Fried is the founder of the company. He also co-founded Alameda Research which is a quantitative trading platform. He has invested via FTX in numerous businesses, including the blockchain startup Sky Mavis, Circle, and the brokerage trading company DriveWealth. (Chipper Cash recently partnered up with DriveWealth in order to provide U.S. stocks for Ugandans.
FTX's first African investment, Chipper Cash, continues the plethora signs pointing towards serious crypto growth. Chainalysis reports that crypto adoption in Africa increased by more than 1,000% over the past year from $105 billion worth of peer-to-peer transactions.
Bankman-Fried believes there is still room for adoption. Despite recent growth in Africa's economy, it is still expensive and slow to move money across the continent. He said that it is the fastest-growing market for grassroots crypto adoption.
The FTX boss stated that FTX's partnership with Chipper Cash aims to make money transfer as easy as a text message, and accelerate adoption of crypto in Africa and elsewhere.
It is difficult to imagine the company using crypto to facilitate its peer-to-peer money movement within the continent, given Bankman-Frieds' statement and the Chipper Cash crypto testing in Uganda and South Africa.
The partnership also has benefits for Chipper Cashs network APIs. This partnership allows developers to use the company's infrastructure to collect payments and deposit them into Chipper wallets. Essentially, Africans using FTX will be able to pay with Chipper Cash via the crypto trading platform.
This will be a compelling use case both for our companies as we scale and as FTX continues to expand their geographic coverage, the CEO stated. It will be exciting to work with them as they do some of the most innovative work within the crypto space.
Serunjogi states that the investment is a key repricing event for company and gives it a strong financial base to continue scaling and keep our leadership in the space.
In markets such as the U.S., Europe and India, closing back-to-back equity round in months has been a common practice. It is only now that it is gaining momentum in Africa.
In the last year, several rounds have been raised by startups such as Mono, Nigerian open bank platform Mono, and Autochek, an automotive tech company. This shows investors' great appetite for African tech, particularly fintech.
This sector is still the largest on the continent. Chipper Cash is the sector that has produced the most unicorns. Chipper cash was the most valued startup on the continent, alongside OPay, officially making it the fourth after Wave, Flutterwave and OPay. After tech talent company Andela achieved the status in September, it is now the fifth unicorn overall.
However, there are six unicorns on the continent, including Interswitch which is a fintech company that has a billion-dollar valuation.
