Adding to the rising investment rounds that have characterized the African fintech space, Chipper Cash, an African cross-border payments company, has raised $150 million in a Series C extension round.
The round was led by Sam Bankman-Fried’s cryptocurrency exchange platform FTX, putting the startup’s valuation at more than $2 billion. Participating in the new round is SVB Capital, the corporate venture capital arm of SVB Financial Group, who led the first Series C round. Other existing investors are Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures and Tribe Capital. The company’s total Series C stands at $250 million but its total funding to date is over $305 million, according to TechCrunch.
The new investment has confirmed Chipper Cash as “the most valuable private startup in Africa”, upholding what the CEO Ham Serunjogi’ earlier told TechCrunch during an interview.
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Chipper Cash has seen its services burgeoned since it was founded in 2018 by Serunjogi and Maijid Moujaled. The app transaction fee-free peer-to-peer cross-border payment service has seen wide adoption across seven African countries – Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya. The startup boasts of over four million users, and has been aggressively exploring new markets outside Africa.
Per TechCrunch, Chipper expanded to the U.K., allowing people to send money from the European nation to Chipper Cash’s African markets, in May. Also last month, the fintech ventured into the U.S. to Africa market, pushing for a share in the saturated market.
While the markets are ripe with competition, Chipper Cash is counting on its cheap services to win a section of each of the markets it has ventured into.
“Chipper Cash is offering remittances considerably cheaper than anyone else,” Serunjogi told TechCrunch over a call. “More important to that is that we are now the first ones that I know honestly to be able to support Africa to the U.S. in terms of sending money.”
Chipper Cash is focusing on U.S. to Africa payment services as a key market to spur growth. In addition, Africa to U.S. outflow services is also in the pipeline. Serunjogi says peer-to-peer money movement from the U.S. to Nigeria and Uganda is currently live for users in those markets. The company will roll out the service to users in Ghana, South Africa and Kenya before the end of the year.
For outflow payment services — sending money from Africa to the U.S. — the CEO says that users in Uganda, South Africa and Kenya will be the first to get access next year.
To augment its cross-border payment services, Chipper Cash has been collaborating with other international payment services. For instance, TechCrunch mentioned that the startup has been picked to offer the newly launched Twitter Tip Jar service, which allows creators to receive money on the platform, to African creators through its payments link.
“The idea for Twitter and ourselves is to offer multiple ways for creators to be able to be paid for their work and their contribution online,” said Serunjogi. “And Twitter worked with us on this given our presence as the largest cross-border payments platform in Africa that could support multiple countries for Africans using Twitter.”
Chipper Cash plans to make its Tip Jar integration accessible for users in the U.S. by next year, said Serunjogi.
The Series C round extension led by FTX offers opportunity for Chipper Cash to expand its play in the international stage. FTX is one of the largest cryptocurrency derivatives exchanges in the world. Last month, the company raised a $420 million round at a $25 billion valuation.
With FTX’s far-reaching wings under the control of Sam Bankman-Fired, Chipper Cash is hoping to also expand its crypto base in Africa. Bankman-Fried said although there is exponential growth in the continent’s crypto market, there is still room for growth. “Despite the recent growth in Africa, moving money across the continent is still slow and expensive. Unsurprisingly it is the fastest growing market with grassroots crypto adoption,” he told TechCrunch, adding that FTX’s partnership with Chipper Cash is to make money transfer as simple as a text message and accelerate the adoption of crypto within Africa and beyond.
Chipper Cash’s new investment has added to the growing equity rounds that have seen African fintech market’s value rise monthly, putting up show of relevance in a stage where similar markets in Asia, Europe and Latin America rule.
Africa has recorded six unicorns, and many more payment services keep springing up, indicating there is still large room for growth. The continent is expected to triple its number of unicorns in 2022.