African fintech startup Chipper Cash raises US$30 million with backing from Jeff Bezos

There appears to be a new focus on African fintech start-ups in recent times. Owing to this, the fintech space in Africa has become the biggest funded sector, per the latest figures. In 2019, African fintech start-ups received US$2 billion in venture capital funding.

Fast forward to 2020 and the buzz continues unabated. Recently, American e-payments firm Stripe ventured into the African e-commerce market by acquiring Nigerian startup firm Paystack.

Also, Dubai’s Network International acquired Nairobi-based fintech DPO Group for US$288 million. In addition, WorldRemit Ltd., a U.K. online money transfer company, acquired Africa focused remittance company Sendwave for US$500 million.

The latest African fintech to attract the attention of venture capitalists is Chipper Cash. The firm offers a cross-border, peer-to-peer payments service in African countries such as Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.

The firm currently has 3 million users on its platform and processes an average of 80,000 transactions daily, according to Techcrunch. It raised US$30 million in a Series B funding round led by Ribbit Capital, a U.S based VC firm that invests in early-stage startups.

One of the participants in the Series B funding round is Bezos Expeditions, the personal VC fund of Jeff Bezos, the founder of Amazon and the world’s richest man. According to Crunchbase data, the investment in Chipper Cash would be the first in Africa for Bezos Expeditions.

It appears Bezos’ interest in the fintech startup was precipitated by its success in raising funding and its future prospect. In May 2019, it raised $2.4 million in seed funding in a round led by Deciens Capital.

Seven months later, it raised US$6 million in Series A funding led by Deciens Capital and Raptor Group. Between these two periods, its users increased from 70,000 to 600,000.

Chipper Cash was founded two years ago in San Francisco by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled. The two met while studying at Grinnell College.

After college, they had stints in big tech firms: Facebook for Serunjogi and Flickr and Yahoo! for Moujaled.

Co-founder Serunjogi believes having the backing of Bezos has incredible benefits beyond the venture. “It’s a big deal when a world-class investor like Bezos or Ribbit goes out of their sweet spot to a new area where they previously haven’t done investments,” he said, according to Techcrunch.

“Ultimately, the winner of those things happening in the African tech ecosystem overall, as it will bring more investment from firms of that calibre to African startups.”

In June 2020, Chipper Cash reached a monthly payments value of $100 million, Serunjogi, the startup’s chief executive said. It plans to expand its products to include business payments solutions, crypto-currency trading options, and investment service and operations in other countries.

To this end, it has added beta dropdowns on its website and app to buy and sell Bitcoin and invest in U.S. stocks from Africa — the latter through a partnership with U.S. financial services company DriveWealth.

“We’ll launch [the stock product] in Nigeria first so Nigerians have the option to buy fractional stocks — Tesla shares, Apple shares or Amazon shares and others — through our app. We’ll expand into other countries thereafter,” said Serunjogi.

On the business financial services side, the startup plans to offer more API payment solutions. “We’ve been getting a lot of requests from people on our P2P platform, who also have business enterprises, to be able to collect payments for sale of goods,” explained Serunjogi.