Chipper Cash, an African cross-border payments firm, has raised $150 million in a Series C expansion round headed by FTX, a cryptocurrency exchange platform founded by Sam Bankman-Fried.
The investment comes just six months after Chipper Cash secured a $100 million Series C financing funded by SVB Capital, SVB Financial Group’s corporate venture capital arm.
SVB Capital, as well as other previous investors such as Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures, and Tribe Capital, reinvested in this extension round.
New investors also took part, although their identities are being kept under wraps for the time being. The company’s total Series C capital is $250 million, but it has raised more than $305 million to date.
Chipper Cash was dubbed “the most valuable private startup in Africa” by CEO Ham Serunjogi during TechCrunch’s last conversation with him, when the company announced its Series C financing.
The statement was left open to interpretation, and various discussions about whether Chipper Cash is a unicorn have erupted since then. Chipper Cash is now one, according to Serunjogi, as this extension round brings its valuation slightly beyond $2 billion.
Serunjogi and Maijid Moujaled established Chipper Cash in 2018 to provide a no-fee peer-to-peer cross-border payment service in Africa via their app. Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa, and Kenya are among the countries that use its services.
This year, the business began to expand beyond the continent. It extended to the United Kingdom in May, allowing users to send money from the European country to Chipper Cash’s African marketplaces.
Chipper Cash, which has over four million users, entered the already crowded US-Africa corridor last month, joining established companies such as Wise, MoneyGram, Sendwave, and Remitly; the US accounts for about 30% of international remittances to Sub-Saharan Africa.
The market for remittances has increased dramatically over the better part of a decade, with the exception of last year, when total remittances were $42 billion, down from $48 billion in 2020, according to the World Bank.
Given the high cost of sending money to Sub-Saharan Africa (the most expensive location in the world), Chipper Cash’s strategy is to give the “best prices” while simultaneously facilitating money transfers from Africa to the United States.
“Chipper Cash offers remittances at a significantly lower cost than anyone else,” Serunjogi told TechCrunch over the phone. “More importantly, we are now the only people I know who can support Africa in terms of transferring money to the United States.”
Chipper Cash isn’t the first to try to offer such a service; platforms like WorldRemit already allow certain African countries like South Africa to send money to the United States.
Serunjogi claims that peer-to-peer money transfers from the United States to Nigeria and Uganda are now available to customers in those countries. Before the end of the year, the service will be available to users in Ghana, South Africa, and Kenya.
Users in Uganda, South Africa, and Kenya would be the first to receive access to outflow payment services – moving money from Africa to the United States — according to the CEO.
Chipper Cash has also been experimenting with social payment systems. Twitter released its Tips feature, also known as Tip Jar, earlier this year to allow authors to earn money on the network. To make it available in diverse locations, the social media company linked with some payment platforms.
Because creators in developed countries have the option of receiving tips via PayPal, Patreon, GoFundMe, Cash App, and Venmo, Chipper Cash was chosen to provide the service to African creators via its payments connection.
“The aim for Twitter and ourselves is to provide a variety of options for creators to be compensated for their work and contributions online,” Serunjogi explained.
“And Twitter collaborated with us on this because we are Africa’s largest cross-border payments platform, capable of supporting several nations for Africans who use Twitter.”
According to Serunjogi, Chipper Cash wants to make its Tip Jar integration available to customers in the United States by next year.
Chipper Cash’s connection with Twitter and cross-border development into the United States demonstrate the company’s growth potential, and the capital from FTX just adds to it.
FTX is one of the world’s biggest bitcoin derivatives exchanges. The company received $420 million in a round last month, valued at $25 billion.
Sam Bankman-Fried, the company’s CEO and co-founder of Alameda Research, a quantitative trading platform, is also the company’s co-founder. He has invested in a variety of companies through FTX, including blockchain startups Sky Mavis and Circle, as well as brokerage trading platform DriveWealth (Chipper Cash recently partnered with DriveWealth to offer U.S. stocks to Ugandans).
Chipper Cash is FTX’s first investment in Africa, and it adds to a growing list of indicators pointing to serious crypto adoption on the continent. According to Chainalysis, crypto adoption in Africa increased by more than 1,000 percent in the last year, with peer-to-peer transaction volume totaling $105 billion.
Bankman-Fried, on the other hand, believes there is still room for adoption. “Despite Africa’s recent expansion, transporting money across the continent remains slow and costly. “It’s not surprising that grassroots crypto adoption is the fastest growing market,” he told TechCrunch.
The goal of FTX’s relationship with Chipper Cash, according to the CEO, is to “make money transfer as simple as sending a text message and speed the adoption of cryptocurrency throughout Africa and beyond.”
Given Bankman-remark Fried’s and Chipper Cash’s crypto experiments in Uganda and South Africa, it’s difficult to imagine the company not employing crypto to facilitate peer-to-peer money transfers within and outside Africa.
Chipper Cash’s Network API is another example of how the relationship is useful. It enables developers to collect and disburse payments into Chipper wallets using the company’s infrastructure. In other words, FTX users in Africa will be able to “Pay using Chipper Cash” on the crypto trading platform.
“As we scale and FTX expands their global coverage, it will be a compelling use case for both of our companies,” the CEO added. “Working with them will be fascinating because they do some of the most inventive work in the crypto sector.”
The investment, according to Serunjogi, is a critical repricing event for the company, providing it with a robust balance sheet that will allow it to continue scaling and “keep our dominance in the space.”
In some markets, such as the United States, Europe, India, and Latin America, closing back-to-back equity rounds in months has become the standard. In Africa, though, it is only now gaining traction.
Startups like Mono, a Nigerian open banking platform, Kuda, a neobank, and Autochek, an automotive tech business, have raised multiple rounds in the last year, reflecting investors’ strong interest in African innovation, particularly fintech.
The sector continues to receive the largest funding on the continent. It has the most unicorns, with Chipper Cash – the continent’s most valuable startup with OPay — being the fourth this year, following Flutterwave, OPay, and Wave. After tech talent startup Andela achieved unicorn status in late September, it’s the fifth overall unicorn.
However, the continent already includes six unicorns, including Interswitch, a fintech behemoth valued at a billion dollars in 2019.
