Afrigather Chipper Money, the Africa-focused fintech unicorn, has laid off 15 individuals throughout varied departments in its fourth spherical of layoffs during the last 12 months, a supply conversant in the corporate’s operations instructed TechCabal. The newest job cuts come six months after the corporate axed practically a dozen roles together with its Chief Operating Officer, Alicia Levine. Many of the staff affected are from the corporate’s US group.
Chipper Money confirmed the brand new layoffs in an announcement to TechCabal, claiming its enterprise was “doing very properly” regardless of the headwinds reported over the previous few months.
“We consistently look to make sure we now have as a lot effectivity as potential inside our international group, and solely a small variety of roles had been impacted by the minor restructuring,” a spokesperson for Chipper Money stated in an electronic mail to TechCabal. “No roles in Africa had been affected—this 12 months we now have expanded groups on the continent. Our enterprise is doing very properly and shall be worthwhile in a couple of months.”
Past the layoffs, Chipper Money additionally minimize the salaries of its remaining US and UK staff, stated two sources related to the corporate.
Chipper didn’t reply to TechCabal’s questions concerning the wage cuts.
Chipper Money was based in 2018 by Ham Serunjogi, initially from Uganda, and Ghanaian Maijid Moujaled. The duo got down to digitize remittance funds into Africa.
The corporate operates a cross-border funds service that permits Africans to ship and obtain cash from eight nations, together with Nigeria, Africa’s greatest economic system by inhabitants and GDP, South Africa, the UK and the US. Chipper Money styled itself as a zero-fee cost platform, permitting customers to make peer-to-peer transactions with out charging a fee upfront. The corporate made income from the trade fee arbitrage concerned in worldwide fund transfers. Along with international fund transfers, the service helps retailers settle for funds on-line.
Chipper Money additionally affords different merchandise that enable on a regular basis customers to commerce cryptocurrency, pay payments, purchase airtime and store on-line instantly from a digital pockets or a digital debit card powered by Visa, the American card firm. Based on info on the startup’s web site, customers in Nigeria and Uganda also can purchase and promote fractional shares in publicly traded corporations listed on American inventory exchanges.
Because it launched, Chipper Money has raised over $300 million in enterprise funding throughout a number of rounds that initially valued it at $2.2 billion in late 2021. A few of its distinguished buyers embody fintech investor Ribbit Capital; Bezos Expeditions, the enterprise fund of Amazon founder Jeff Bezos; Silicon Valley Financial institution; and FTX, the failed crypto trade.
Buoyed by the pandemic, digital funds accelerated in Africa, fueling Chipper Money’s progress within the area. By 2021, the corporate’s income had grown 4 instances to $75 million, in comparison with $18 million within the earlier 12 months, in response to Forbes. Firm insiders say its annual income topped $100 million by the tip of 2022.
Chipper Money claimed it had over 4 million customers at its peak in 2021. Now, the corporate boasts over 5 million downloads on the Apple and Google app shops after splashy advertising campaigns, together with a partnership with Grammy-award-winning musician Burna Boy, which business insiders say may very well be value as a lot as $1 million.
Backed by a whole bunch of tens of millions of {dollars}, Chipper Money had adopted a “growth-at-all-cost” mindset to justify its unicorn valuation in a difficult macroeconomic atmosphere like Africa. The startup employed aggressively within the UK and US, the place it opened an workplace in San Francisco. It recruited 250 new staff between 2021 and 2022, doubling its workforce to 450.
However Chipper Money’s progress spree started to chill as increased rates of interest within the US to sort out inflation put stress on corporations and sparked fears of a potential recession. Enterprise funding dried up, and startups, together with Chipper Money, confronted urgency to preserve prices. The fintech firm has additionally seen renewed competitors from rivals, together with Flutterwave, Eversend and LemFi, promising to simplify home and worldwide cash transfers.
In late 2022, Chipper Money minimize round 180 jobs, representing 40% of its workforce. By February 2023, no less than six of its senior management group members had left the corporate, together with its chief working officer, chief info officer, chief income officer, international head of promoting and its chief compliance officer.
“The final two years had been a interval of fast progress and scaling for us as a enterprise and, to replicate this, our international headcount grew by round 250 individuals,” stated Chipper Money CEO Ham Serunjogi in February after the second spherical of job cuts. “Nonetheless, given the macroeconomic local weather, we’re narrowing our present focus to core markets and merchandise.”
The startup additionally ditched plans to broaden to new markets in Europe and the Center East. And with that organizational pivot, Serunjogi defined, “The truth is that we, sadly, want a smaller group at Chipper.”
Chipper Money has confronted extra monetary stress after two of its distinguished buyers, FTX and Silicon Valley Financial institution, collapsed between Nov. 2022 and Mar. 2023. Whereas the startup has reassured that its enterprise is secure, a glance into FTX’s monetary assertion confirmed it had marked down Chipper Money’s valuation from $2 billion to $1.25 billion. Different reviews declare the startup had slashed the worth of its worker inventory choices by as a lot as 70%.
Chipper Money has additionally reportedly raised $25 million in convertible debt from an undisclosed investor that might convert at a $450 million valuation within the occasion of an acquisition or a brand new fundraise.
The corporate is trying to preserve money and prolong its runway in a troublesome fundraising atmosphere.
