Fintech is one of Africa’s most vibrant sectors. From Kenya’s famous Mpesa, Opay, Flutterwave and now Nigeria’s Chipper cash, it has proven to be Africa’s ‘goldmine’. This was, however, not unexpected. The combined impact of increasing internet penetration and mobile usage in the continent is opening up new opportunities for an otherwise underserved and remote region. Smartphones and even computers are powering the emergence of an ecosystem that is fostering innovation at a rate never seen before in the continent.

While payment systems and peer to peer platforms have been the focus of fintech innovation in recent years, cross border transfers is still an overlooked niche. The regulatory hassles and bureaucratic red tape have been inhibiting factors in cross border trade. Herein, especially with the official ratification of the Africa Continental Free Trade Area (AfCTA), lies a great opportunity for entrepreneurs.

Chipper Cash, a 3-year fintech startup based in Nigeria, has been one of the key players in this space. The company was founded in 2018 by Ghanaian Maijid Moujaled and Ugandan Ham Serunjogi who, after stints in tech giants such as Facebook, Flickr and Yahoo, decided to form their own startup.

The company operates in seven African countries: Tanzania Ghana, Uganda, Kenya, Nigeria, Rwanda, South Africa and has also recently began operations in the UK, their only venture outside of Africa. They mainly offer mobile-based P2P, no-fee payment services and also run Chipper Checkout – a paid product that is merchant-based. This provides the much-needed revenue to support Chipper Cash’s free mobile money platform.

Funding

Chipper Cash has always enjoyed the support of some of the tech world’s largest financiers. For their seed funding, Maijid and Serunjogi got the backing of 500 Startups and Liquid 2 Ventures. Expanding to Southern Africa and Nigeria, Chipper plus a payment partnership with Visa in April of 2019, the company managed to raise $ 13.8 million in their Series A funding in June of the same year.

In their Series B funding, Chipper Cash raised a whopping $30 million in a round that was led by Ribbit Capital and most notably Bezos Expedition – Jeff Bezos’ personal VC fund.

No surprise then that in its most recent Series C round, Chipper was able to raise $100 million. This time however the Lagos-based startup was able to garner the attention of SVB Capital, Silicon Valley Bank’s investment arm. Also participating were some of the regulars such as Ribbit Capital, Bezos Expeditions, One Way Ventures, 500 Startups plus new backers like Deciens Capital, Tribe Capital and Brue2 Ventures.

This high level of optimism in Chipper Cash’s future is however not misplaced. The company has consistently demonstrated strong signs of growth since its formation. It is for instance planning to hire 100 more employees to add to its already impressive 200-person workforce. More importantly, usage of Chipper Cash has increased by 33% from last year to 4 million active users who together have processed more than $ 100 million on the platform as of June 2020. They have also averaged 80,000 daily transactions.

Joining Africa’s Unicorns

Gauging Chipper’s valuation has been a rather tricky affair. This is because its founders have been intentionally coy on realizing these actual figures. In an interview with Techcrunch, co-founder Serunjogi had this to say on the company’s valuation:

“Obviously, we’re not getting into our valuation, but we’re probably the most valuable private startup in Africa today after this round. So that’s a reflection of the environment that regulators like CBN have created to allowed innovation and growth.” 

Africa has been bereft of unicorns (startups valued at more than $1 billion). These have mainly been concentrated in the West and in East Asia. 2021 however seems to be a special year for startups everywhere as unicorns seem to be popping everywhere, including Africa.

For long, in fact, until just last week, Flutterwave was the only private unicorn startup in Africa. It’s recently been joined by China-backed Opay which is currently raising $400 million, placing it at a valuation of around $1.5 billion.

Chipper Cash is also said to have joined this elite group as the company is estimated to be valued between $1 billion to $2 billion. Asked to clarify this estimation, Serunjogi remained coy saying, “We’re not commenting on the size of our valuation publicly. One of the things that I’ve been quite keen on internally and externally is that the valuation of our company has not been a focus for us. It’s not a goal we’re aspiring to achieve. For us, the thing that drives us is that we have a product that is impactful to our users.”

Moreover, fintech seems to be the key target for investment in Africa. Of the $1.5 billion raised by startups in 2020, Fintech accounted for 25%. This year the trend seems to be only growing stronger as four startups ie TymeBank, Opay, Flutterwave and Chipper Cash have all received $100 million in funding. 3 of them: Opay, Flutterwave and Chipper Cash have all gained unicorn status joining Fawry, Interswitch and Jumia.

Another more interesting fact is that the time taken to reach this landmark seems to be shortening. While companies like Fawry and Interswitch took about 13 years, newcomers like Flutterwave, Jumia and Opay took five, four and three years respectively. At this rate, Africa is bound to catch up with the rest of the world and finally take a place as a tech-savvy region.