African Fintech company Chipper Cash, which was doubly backed by collapsed financial giants FTX and Silicon Valley Bank, may be experiencing some financial troubles. Or is it?
Chipper Cash CEO Ham Serunjogi put out a statement on Sunday claiming that the recent failings of both Silicon Valley Bank and Silvergate Bank, while chaotic, had an “insignificant” effect on the payments company.
“We had a very limited amount of money (only about $1M) held in our SVB account at the time the bank was taken over by the California regulator,” explained Serunjogi. And while SVB was an investor in Chipper, its funds were delivered immediately.
"What is happening now doesn’t change that," he wrote. "Additionally, SVB wasn’t the only investor in that round."
Chipper appears to have had no exposure to Silvergate.
Meanwhile, a Tuesday Bloomberg report citing "people familiar with the matter" claimed that the company is weighing a possible sale. However, an official response from the company to the outlet asserted that Chipper Cash has “never sought to be acquired.”
Chipper did not respond to a request for comment from Decrypt.
New Crypto Venture Fund to Invest in African Startups
The co-founder of Crypto for Black Economic Empowerment (CBBE), a group of 100 Black founders and creators, today announced the launch of a new crypto venture capital fund: Audacity. Audacity Fund I is set to distribute money to African crypto startups, with a particular focus on decentralized finance (DeFi), the term for blockchain-based projects that cut out financial intermediaries like banks so that people can lend, borrow, and trade with one another directly. 100 years after the thriving...
Chipper Cash is an app for sending and receiving payments across Africa. It also allows users to send and receive crypto and to buy cryptocurrencies including Bitcoin, Ethereum, and USDC within the app.
All three cryptocurrencies suffered in the aftermath of SVB’s failure on Friday, but quickly recovered after the Federal Reserve confirmed a uniform bailout for all of the bank’s depositors.
Amid the weekend turmoil, the CEO added that customer operations were not interrupted by SVB’s failure, and that the firm has multiple other banking partners in the United States. Nevertheless, he said, SVB played a special role in supporting the company, particularly in its early days.
Bitcoin Surges Nearly 20% Following Silicon Valley Bank 'Bailout'
The price of Bitcoin is surging, up 19.8% in the past day after regulators and the Joe Biden Administration stepped in to assuage investors that depositors in the failed Silicon Valley Bank would be made whole—and that the U.S. banking system remains on stable ground. At the time of writing, Bitcoin was trading for $24,428, a near 20% increase in the past day and 6% jump in the past hour, according to CoinGecko. Ethereum, the second largest digital asset, was up 15% in 24 hours; it is up 3.4% in...
"Five years ago when I was trying to open Chipper’s first bank account, SVB was the only bank that would accept us," Serunjogi wrote. "I know there are countless other startups all doing very important work who would say the same thing."
"it is quite sad to see such a pillar of our ecosystem brought to its knees," he added.
In 2021, Chipper became Africa's "most valuable startup" when it closed a $100 million Series B led by SVB. Nevertheless, Serunjogi said the bank owns just 2% of Chipper.
Like many crypto startups, Chipper has weathered some standard bear market troubles. After raising an additional $150 million from FTX in late 2021, the defunct exchange marked Chipper’s valuation down from $2 billion to $1.25 billion 13 months later. During the same month, Chipper laid off 12.5% of its workforce.
