Chipper Cash, the Africa-focused fintech unicorn, has laid off 15 people across various departments in its fourth round of layoffs over the last year, a source familiar with the company’s operations told TechCabal. The latest job cuts come six months after the company axed nearly a dozen roles including its Chief Operating Officer, Alicia Levine. Most of the employees affected are from the company’s US team.
Chipper Cash confirmed the new layoffs in a statement to TechCabal, claiming its business was “doing very well” despite the headwinds reported over the last few months.
“We constantly look to ensure we have as much efficiency as possible within our global organization, and only a small number of roles were impacted by the minor restructuring,” a spokesperson for Chipper Cash said in an email to TechCabal. “No roles in Africa were affected—this year we have expanded teams on the continent. Our business is doing very well and will be profitable in a few months.”
Beyond the layoffs, Chipper Cash also cut the salaries of its remaining US and UK employees, said two sources connected to the company.
Chipper did not respond to TechCabal’s questions about the salary cuts.
Chipper Cash was founded in 2018 by Ham Serunjogi, originally from Uganda, and Ghanaian Maijid Moujaled. The duo set out to digitize remittance payments into Africa.
The company operates a cross-border payments service that allows Africans to send and receive money from eight countries, including Nigeria, Africa’s biggest economy by population and GDP, South Africa, the UK and the US. Chipper Cash styled itself as a zero-fee payment platform, allowing users to make peer-to-peer transactions without charging a commission upfront. The company made revenue from the exchange rate arbitrage involved in international fund transfers. In addition to global fund transfers, the service helps merchants accept payments online.
Chipper Cash also offers other products that allow everyday consumers to trade cryptocurrency, pay bills, buy airtime and shop online directly from a digital wallet or a virtual debit card powered by Visa, the American card company. According to information on the startup’s website, users in Nigeria and Uganda can also buy and sell fractional stocks in publicly traded companies listed on American stock exchanges.
Since it launched, Chipper Cash has raised over $300 million in venture funding across multiple rounds that originally valued it at $2.2 billion in late 2021. Some of its prominent investors include fintech investor Ribbit Capital; Bezos Expeditions, the venture fund of Amazon founder Jeff Bezos; Silicon Valley Bank; and FTX, the failed crypto exchange.
Buoyed by the pandemic, digital payments accelerated in Africa, fueling Chipper Cash’s growth in the region. By 2021, the company’s revenue had grown four times to $75 million, compared to $18 million in the previous year, according to Forbes. Company insiders say its annual revenue topped $100 million by the end of 2022.
Chipper Cash claimed it had over 4 million users at its peak in 2021. Now, the company boasts over 5 million downloads on the Apple and Google app stores after splashy marketing campaigns, including a partnership with Grammy-award-winning musician Burna Boy, which industry insiders say could be worth as much as $1 million.
Backed by hundreds of millions of dollars, Chipper Cash had adopted a “growth-at-all-cost” mindset to justify its unicorn valuation in a challenging macroeconomic environment like Africa. The startup hired aggressively in the UK and US, where it opened an office in San Francisco. It recruited 250 new employees between 2021 and 2022, doubling its workforce to 450.
But Chipper Cash’s growth spree began to cool as higher interest rates in the US to tackle inflation put pressure on companies and sparked fears of a possible recession. Venture funding dried up, and startups, including Chipper Cash, faced urgency to conserve costs. The fintech company has also seen renewed competition from rivals, including Flutterwave, Eversend and LemFi, promising to simplify domestic and international money transfers.
In late 2022, Chipper Cash cut around 180 jobs, representing 40% of its workforce. By February 2023, at least six of its senior leadership team members had left the company, including its chief operating officer, chief information officer, chief revenue officer, global head of marketing and its chief compliance officer.
“The last two years were a period of rapid growth and scaling for us as a business and, to reflect this, our global headcount grew by around 250 people,” said Chipper Cash CEO Ham Serunjogi in February after the second round of job cuts. “However, given the macroeconomic climate, we are narrowing our current focus to core markets and products.”
The startup also ditched plans to expand to new markets in Europe and the Middle East. And with that organizational pivot, Serunjogi explained, “The reality is that we, unfortunately, need a smaller team at Chipper.”
Chipper Cash has faced additional financial pressure after two of its prominent investors, FTX and Silicon Valley Bank, collapsed between Nov. 2022 and Mar. 2023. While the startup has reassured that its business is safe, a look into FTX’s financial statement showed it had marked down Chipper Cash’s valuation from $2 billion to $1.25 billion. Other reports claim the startup had slashed the value of its employee stock options by as much as 70%.
Chipper Cash has also reportedly raised $25 million in convertible debt from an undisclosed investor that would convert at a $450 million valuation in the event of an acquisition or a new fundraise.
The company is looking to conserve cash and extend its runway in a difficult fundraising environment.