Chipper Money, an African cross-border funds firm, has raised $150 million in a Collection C extension spherical led by Sam Bankman-Fried’s cryptocurrency alternate platform FTX.
The funding comes barely six months after Chipper Money closed its first Collection C spherical of $100 million, led by SVB Capital, the company enterprise capital arm of SVB Monetary Group.
SVB Capital reinvested on this extension spherical and different present buyers reminiscent of Deciens Capital, Ribbit Capital, Bezos Expeditions, One Manner Ventures and Tribe Capital.
Whereas new buyers additionally participated, they continue to be unnamed for the time being. The corporate’s whole Collection C stands at $250 million however its whole funding so far is over $305 million.
Throughout FiratNews’s final dialog with CEO Ham Serunjogi, when the corporate introduced its Collection C spherical, he known as Chipper Money “probably the most worthwhile personal startup in Africa” with out specifics on the precise worth.
The assertion was left open for interpretation and several other debates have sparked since then on whether or not Chipper Money is a unicorn or not. Properly, Serunjogi can affirm that Chipper Money is certainly one now, as this extension spherical takes its valuation barely above $2 billion.
Serunjogi based Chipper Money with Maijid Moujaled in 2018 to supply a no-fee peer-to-peer cross-border fee service in Africa by way of its app. Its companies are used throughout seven African nations — Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.
This yr, the corporate started to make strides exterior the continent. In Could, it expanded to the U.Ok., permitting folks to ship cash from the European nation to Chipper Money’s African markets.
Final month, Chipper Money, with over 4 million customers, ventured into the already aggressive U.S. to Africa hall with established gamers reminiscent of Smart, MoneyGram, Sendwave and Remitly; the U.S. is chargeable for nearly 30% of the worldwide remittances to sub-Saharan Africa.
Although the margins for remittances are small, the market has grown exponentially for the higher a part of the previous decade, besides final yr when whole remittances stood at $42 billion, down from $48 billion in 2020, per the World Financial institution.
Contemplating how costly it’s to ship cash to sub-Saharan Africa (it’s the costliest area to ship cash globally), Chipper Money’s play is to supply the “greatest costs” and in addition facilitate cash motion from Africa to the U.S.
“Chipper Money is providing remittances significantly cheaper than anybody else,” Serunjogi advised FiratNews over a name. “Extra vital to that’s that we at the moment are the primary ones that I do know truthfully to have the ability to help Africa to the U.S. by way of sending cash.”
Platforms reminiscent of WorldRemit already enable particular African nations like South Africa to ship cash to the U.S., so Chipper Money shouldn’t be totally the primary to attempt to supply such a service.
With that mentioned, Serunjogi says peer-to-peer cash motion from the U.S. to Nigeria and Uganda is at present reside for customers in these markets. The corporate will roll out the service to customers in Ghana, South Africa and Kenya earlier than the top of the yr.
For outflow fee companies — sending cash from Africa to the U.S. — the CEO says that customers in Uganda, South Africa and Kenya would be the first to get entry subsequent yr.
Chipper Money has additionally been busy tapping into the world of social funds. Earlier this yr, Twitter launched its Ideas characteristic, also referred to as Tip Jar, to permit creators to obtain cash on its platform. The social media firm built-in with some funds platforms to make it accessible in numerous areas.
As creators in developed markets can choose PayPal, Patreon, GoFundMe, Money App and Venmo to obtain ideas, Chipper Money was picked to supply the service to African creators by means of its funds hyperlink.
“The thought for Twitter and ourselves is to supply a number of methods for creators to have the ability to be paid for his or her work and their contribution on-line,” mentioned Serunjogi.
“And Twitter labored with us on this given our presence as the most important cross-border funds platform in Africa that would help a number of nations for Africans utilizing Twitter.”
Chipper Money plans to make its Tip Jar integration accessible for customers within the U.S. by subsequent yr, mentioned Serunjogi.
The partnership with Twitter and cross-border growth to the U.S. reveals the expansion alternative for Chipper Money and the funding from FTX solely makes it extra obtrusive.
FTX is among the largest cryptocurrency derivatives exchanges on the earth. Final month, the corporate raised a $420 million spherical at a $25 billion valuation.
Sam Bankman-Fried runs the corporate and can also be the co-founder of Alameda Analysis, a quantitative buying and selling platform. By way of FTX, he has invested in lots of companies, together with blockchain startups Sky Mavis and Circle and brokerage buying and selling firm DriveWealth (Chipper Money lately partnered with DriveWealth to supply U.S. shares to Ugandans).
Chipper Money is FTX’s first funding in Africa and continues the plethora of indicators pointing to severe crypto progress and recognition on the continent. This previous yr, crypto adoption in Africa grew greater than 1,000% from peer-to-peer transaction quantity totaling $105 billion, in keeping with Chainalysis.
However Bankman-Fried maintains there’s but extra room for adoption. “Regardless of the latest progress in Africa, shifting cash throughout the continent continues to be gradual and costly. Unsurprisingly it’s the quickest rising market with grassroots crypto adoption,” he advised FiratNews.
The FTX boss added that FTX’s partnership with Chipper Money is to “become profitable switch so simple as a textual content message and speed up the adoption of crypto inside Africa and past.”
Given Bankman-Fried’s assertion and Chipper Money crypto exams in Uganda and South Africa, it’s laborious to not see the corporate utilizing crypto to impact its peer-to-peer cash motion inside and out of doors the continent.
One other occasion the place the partnership proves useful is with Chipper Money’s community APIs. It basically permits builders to leverage the corporate’s infrastructure to gather and disburse funds into Chipper wallets. In essence, Africans who use FTX can have the choice to “Pay with Chipper Money” on the crypto buying and selling platform.
“That’s going to be a compelling use case for each of our corporations as we maintain scaling and as FTX retains scaling their geographical protection,” the CEO mentioned. “They do a number of the most modern work within the crypto house, so working with them goes to be fairly thrilling.”
Serunjogi says the funding is an important repricing occasion for the corporate and offers it a powerful stability sheet to proceed scaling and “preserve our lead within the house.”
Closing back-to-back fairness rounds in months, to an extent, has turn into the norm in markets just like the U.S., Europe, India, and Latin America. Nonetheless, it’s solely simply choosing up pace in Africa.
Throughout the previous yr, startups like Nigerian open banking platform Mono, neobank Kuda and automotive tech firm Autochek have raised successive rounds indicating buyers’ large urge for food for African tech, particularly fintech.
The sector stays probably the most funded on the continent. It has produced probably the most unicorns, with Chipper Money — probably the most worthwhile startup on the continent alongside OPay — formally turning into the fourth this yr after Flutterwave, OPay and Wave. It’s the fifth total unicorn after tech expertise firm Andela reached the standing in late September.
Usually, nonetheless, the continent has six present unicorns, together with Interswitch, a fintech large that attained a billion-dollar valuation in 2019.