African fintech company Chipper Cash is reportedly evaluating strategic options that include a potential sale of the business or raising capital from new investors. According to a Bloomberg report citing unnamed sources, the company began exploring these possibilities before the sudden collapse of Silicon Valley Bank, and no final decision has been made.
Strategic review follows a sharp valuation reset
Chipper Cash has been one of the better-known fintech startups on the continent. In late 2021, it raised a $150 million Series C extension led by the now-defunct crypto exchange FTX. Silicon Valley Bank, which had led the initial Series C round, also participated, alongside Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures, and Tribe Capital.
But after a turbulent 2022, capped by the collapse of FTX, the company’s valuation fell significantly. The report says Chipper Cash dropped from $2 billion in the fourth quarter of 2022 to $1.25 billion by December 2022. Facing rising costs, the company also reduced its workforce.
Company says it never sought an acquisition
The failure of SVB prompted speculation that Chipper Cash, as one of the bank’s clients, could face material disruption. The company pushed back on that narrative. In a statement cited by Bloomberg, Chipper Cash said it had received various merger and acquisition proposals over time, as is common for companies of its profile, but stressed that it had never sought to be acquired.
In a March 12 message to stakeholders, co-founder and CEO Ham Serunjogi said Chipper Cash had only insignificant exposure to both SVB and Signature Bank. At the time of SVB’s collapse, the company reportedly held around $1 million at the bank.
Serunjogi also sought to minimize concerns about SVB’s influence as a shareholder. He said SVB owned only about 2% of Chipper Cash and was just one of several investors in the funding round. According to the CEO, the startup benefits from a broad and supportive investor base that has backed the company since its early days.
Broader implications for African fintech
For now, Chipper Cash appears to be reviewing its capital and strategic options against a tougher funding backdrop. Whether the company ultimately brings in new investors, pursues a transaction, or remains independent, its next move is likely to be closely watched as a signal for investor sentiment toward African fintech after a period of valuation pressure and market dislocation.