- In 2021, Chipper Cash application had over 4 million active users across Kenya, Uganda, Rwanda, etc.
- Chipper Cash fired more than 12.5% of its staff in December 2022 to keep its operation running.
- Chipper Cash’s final FTX-led Series C funding of $150 million led to its current declining state.
Africa’s fintech industry has thrived throughout the decade showing a consistent increase in revenue. Unfortunately, with the unforeseen FTX crash, this trend has significantly been upset. Various organizations and companies associated with FTX have lost millions. Unfortunately, Chipper Cash, a unicorn African startup that supported cross-border payments was severely affected. In December 2022, the sudden plummet of the crypto titan had a ripple effect on its daily transaction. For the organization to survive the 2022 crypto winter it had to lay off more than 50 employees.
This is just one of the many after-effects of the FTX crash. In truth, Africa’s crypto ecosystem is persevering quite well compared to outside organizations.
The Unicorn African startup; Chipper Cash
Chipper Cash is an African cross-border payment platform that has rocked Africa’s entire fintech industry. In 2018, Ham Serunjogi, a Ugandan and Maijid Moujaled founded the company to address the various issues that plagued Africa’s financial structure. Over the years, their efforts, brilliant marketing strategies and sophisticated functionalities have eventually surpassed all expectations. Today Chipper cash is one of the many African startups that have earned the title, “unicorn”.
Also, Read Chipper Cash: An African fintech grayling to boost cryptocurrency adoption in Africa
In less than three years, the organization developed an easy-to-use app that essentially rendered the need for banking systems obsolete. In 2021, the application had over 4 million active users across Kenya, Uganda, Rwanda, Tanzania, Nigeria, South Africa, Ghana, and the UK. To add to their various features, this cross-border payment platform also deals with crypto trading.From its debut in the UK, it was clear that this Unicorn African startup had the potential for greatness. It had acquired several crucial figureheads like Deceins Capital. In addition, they were also able to gain $13.8 million in their Series A funding. This led to the creation of their well know Chipper Cash Mobile App. Its functionalities and reach garnered the interest of several additional investors. This led to a Series B funding of $30 million from Ribbit Capital and Bezos Expedition. This amount funded an upgrade for their mobile application allowing it to reach up to 80,000 transactions per day. The company continued to add its reach by placing adding several stations in Africa and later on adding more staff.
What later earned Chipper Cash its title, Unicorn African startup was its final FTX-led Series C funding of $150 million. At the time, this partnership propelled the cross-border payment platform to new heights. Unfortunately, it’s this same collaboration that led to the company’s recent downfall.
The Unicorn African startup makes hard decisions
It is common knowledge that FTX was essentially a titan within the crypto ecosystem alongside Coinbase and Binance. Thus when it abruptly came tumbling down, it had a ripple effect. This caused 2022 steadily ongoing crypto winter and affected virtually all its previous associates.Chipper Cash was, unfortunately, among one of the many companies that had close relations with FTX. As a result, the cross-border payment platform received an immense backlash from its customers and Africa’s fintech Industry. An underrated factor within the crypto industry is transparency and trust. Crypto traders essentially gamble each day when dealing with crypto volatility. Thus when they discover that a multimillion-dollar crypto exchange cannot pay them their dues, chaos will erupt. Unfortunately, this fear stretched to organizations associated with FTX leading to most organizations bearing a significant drop in transaction rates. Such was the case with Chipper Cash, a top player in Africa’s fintech Industry.
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According to LinkedIn, Chipper cash has about 400 employees that aid in their overall functionalities. Unfortunately, the Unicorn African startup could not see a way out other than laying off various employees to save on cost. Thus the organization fired more than 12.5% of its staff in December 2022. Its engineering department was affected most since it was one of the highest-paid departments in the Unicorn African startup. This was a sudden and unexpected shift from the organization, and many were displeased with this turn of events.
Erin Fusaro, the VP of Engineering at Chipper Cash, stated that it was a drastic turn and that she would willingly help those let go to find new jobs.
Despite the sudden turn of events for the cross-border payment platform, it was not the last of it. Following the 2022 crypto winter, plenty of organizations had to cut down on costs in one way or another. Those who cannot find a way to gain more or save will end up declaring bankruptcy. At the end of it, Africa’s fintech Industry was also significantly affected. Generally, more customers grew sceptical about the entire concept of DeFi. It eventually worsened as governments tightened their leash on regulations flagging any fintech industry that violated it.
Chipper Cash laying off its workers was merely a start. There are rumours that this top player in Africa’s fintech is about to face another employee layoff to keep above the water of bankruptcy.