One of Africa’s fintech giants, Chipper Cash, is said to be weighing the possibility of selling the business or bringing in new investors. According to the CEO of the FTX and Silicon Valley Bank-backed fintech startup, Chipper Cash had insignificant exposure to both SVB and Signature Bank.
Chipper Cash ‘Never Sought to Be Acquired’
The FTX and Silicon Valley Bank (SVB) backed-African fintech giant, Chipper Cash, is weighing options including the sale of the business or bringing in new investors, a Bloomberg report that cites unnamed sources has said. According to the report, the fintech, which began exploring its options before SVB’s abrupt collapse, is yet to make a final decision on which course of action it will take.
As previously reported by Bitcoin.com News in late 2021, Chipper Cash successfully raised $150 million in a Series C extension that was led by the now-collapsed crypto exchange FTX. SVB, which led the first Series C, also participated in the round as did Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures, and Tribe Capital.
However, following a turbulent 2022 which climaxed with FTX’s collapse, Chipper Cash saw its valuation drop from $2 billion in the fourth quarter (Q4) of 2022 to $1.25 billion by Dec. 2022. Faced with rising costs, Chipper Cash also trimmed its workforce.
Insignificant Exposure to SVB
Meanwhile, the shutdown of SVB by U.S. authorities is reported to have fueled speculation that Chipper Cash — a client of SVB — would be hard hit by the bank’s demise. However, in a statement sent to Bloomberg, Chipper Cash insisted that the owners had never considered selling the business.
“It’s been fairly common practice for us to receive various M&A proposals from different parties, which we evaluate to varying degrees. That being said, we have never sought to be acquired,” the fintech reportedly said.
In his March 12 message to stakeholders, Chipper Cash co-founder and CEO Ham Serunjogi claimed the fintech unicorn had insignificant exposure to both SVB and Signature Bank. At the time of SVB’s collapse, Chipper Cash had about $1 million held at the bank.
Serunjogi also sought to downplay SVB’s perceived influence on the fintech by pointing to the collapsed bank’s shareholding in Chipper Cash.
“SVB wasn’t the only investor in that round – we had several other new and existing investors participate in the $100m round – and SVB owns a very small part of Chipper ~2%. Chipper is very fortunate to have a very broad and supportive investor base that has supported us from our earliest days and continues to do so today,” the CEO said.
Register your email here to get a weekly update on African news sent to your inbox:
What are your thoughts on this story? Let us know what you think in the comments section below.
Read the full article here
Discussion about this post