With the involvement of Bezos Expeditions, the personal VC fund of Amazon CEO Jeff Bezos, African cross-border Fintech company Chipper Cash has raised a $30 million Series B funding round led by Ribbit Capital.
Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled created Chipper Cash in San Francisco in 2018. In seven nations, the company provides mobile, no-fee, P2P payment services: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa, and Kenya.
The start-up also operates Chipper Checkout, a merchant-focused, fee-based payment product that generates revenue to support the free mobile money business of Chipper Cash, alongside its P2P app. The business has expanded to 3 million users and processes an average of 80,000 transactions daily on its website. According to CEO Ham Serunjogi, Chipper Cash hit a monthly payment volume of $100 million in June 2020.
The start-up plans to broaden its products and geographic reach as part of the Series B increase. That involves providing more business payment solutions, cryptocurrency trading options, and investment services on the product side.
"At our heart, we will always be a P2P financial transfer network. But, Serunjogi told TechCrunch on a call, we had demanded from our users to provide other value services... such as buying cryptocurrency assets and making stock investments.
On its website and app, Chipper Cash has introduced beta dropdowns to buy and sell Bitcoin and invest in U.S. stocks from Africa, the latter via a collaboration with DriveWealth, the U.S. financial services business.
We will first launch [the stock product] in Nigeria, so that Nigerians can purchase fractional stocks via our apps, such as Tesla shares, Apple shares or Amazon shares, and others. We will extend into other nations afterward,' Serunjogi said.
The start-up plans to deliver more API payment solutions on the company's financial services side. "We have received a lot of requests to be able to obtain payments for the selling of products from people on our P2P website, who also have business enterprises," Serunjogi explained.
Chipper Cash is also planning to use its Series B funding to further expand its country, which the company will announce by the end of 2021.
The sponsorship of Chipper Cash by Jeff Bezos follows a recent series of events that have increased the profile of the start-up scene in Africa. The continent's tech ecosystem has been one of the world's fastest-growing in venture capital and start-up growth over the last decade, concentrated in countries such as Nigeria, Kenya, and South Africa.
Bringing online the huge unbanked population of Africa and underbanked consumers and SMEs has been a major factor. According to World Bank numbers, about 66 percent of Sub-Saharan Africa's 1 billion people don't have a bank account.
As such, fintech has become the top-funded tech industry in Africa, receiving the bulk of an estimated $2 billion in VC that went to startups in 2019. Even with the rapid growth of venture financing over the last decade, the African tech scene was performance light, with only one recognized unicorn (Jumia e-commerce venture) a handful of exits, and no big offerings of public share. Last year that changed.
Jumia, backed by investors including Goldman Sachs and Mastercard, went public in an NYSE IPO in April 2019. Later in the year after a $200 million investment by Visa, Nigerian fintech firm Interswitch achieved unicorn status.
Network International acquired East African payments DPO for $288 million this year and WorldRemit acquired Sendwave for $500 million in August.
Last month, when Stripe acquired Nigerian payment gateway start-up Paystack for a record $200 million, one of the most important liquidity events in African tech happened.
A spokesperson for Bezos Expeditions confirmed the investment of the fund in Chipper Cash in an email to TechCrunch, but refused to comment on further plans to back African startups. The investment will be the first in Africa for the fund, according to Crunchbase data. It's worth noting that Bezos Expeditions is not related to Amazon, the hallmark business venture of Jeff Bezos.
For Chipper Cash, for the San Francisco-based payments firm and founders Ham Serunjogi and Maijid Moujaled, the $30 million Series B raise caps an event-filled two years. The two came to America for studies, met in Iowa while studying at Grinnell College, and went to Silicon Valley for major tech stints: Serunjogi's Facebook and Moujaled's Flickr and Yahoo!.
The startup call beckoned and the duo persuaded 500 Entrepreneurs and Liquid 2 Ventures, co-founded by American football legend Joe Montana, to assist their business with seed funds after launching Chipper Cash in 2018. In 2019, the start-up expanded to Nigeria and Southern Africa entered into a payment agreement with Visa in April, and raised Series A $13.8 million in June.
Ham Serunjogi, the founder of Chipper Cash, claims that the backing of his business by a prominent tech figure, such as Jeff Bezos (the richest individual in the world), has benefits beyond his company.
When a world-class investor like Bezos or Ribbit ventures out of their sweet spot to a new field where they have not previously made investments," he said, "it's a big deal. "Ultimately, the African tech ecosystem overall is the winner of those stuff happening, as it would attract more money to African startups from companies of that caliber."
