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.
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.
"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.