Africa-focused fintech, Chipper Cash, has laid off 15 people across various departments, primarily from its US team, in what is its fourth round of layoffs over the past year due to financial challenges.
This new layoff comes six months after the removal of nearly a dozen roles, including its Chief Operating Officer, Alicia Levine.
In a statement confirming the layoffs, Chipper Cash added that its business is “doing very well” despite recent headwinds. The company stated that it continually seeks efficiency in its global organization, and that only a small number of roles were affected by the restructuring. Chipper Cash mentioned that no roles in Africa were impacted, and it has expanded teams on the continent.
Additionally, the company has reportedly cut the salaries of its remaining US and UK employees, though it has yet to answer questions about the nature of the salary cuts.
Early Start
Founded in 2018 by two African entrepreneurs, Ham Serunjogi from Uganda and Maijid Moujaled from Ghana, Chipper Cash aims to digitise remittance payments into Africa. The fintech operates a cross-border payments service allowing money transfers between eight countries. The company has positioned itself as a zero-fee payment platform, generating revenue from exchange rate arbitrage in international fund transfers. It also offers services such as cryptocurrency trading, bill payments, and online shopping.
Buoyed by the surge in digital payments in Africa due to the COVID-19 pandemic, Chipper Cash experienced significant growth, raising over $300 million in venture funding. Its unicorn valuation reached $2.2 billion in late 2021, with investments from notable backers like Ribbit Capital, Bezos Expeditions, and FTX.
Setbacks
However, the company’s growth began to slow, and it faced increased competition from rivals. Higher interest rates in the US, funding challenges, and a need to conserve costs led to a series of job cuts and organisational changes. Noting this, Chipper Cash abandoned plans to expand to new markets in Europe and the Middle East, opting for a focus on core markets and products.
The fintech firm also faced financial pressure when two prominent investors, FTX and Silicon Valley Bank, collapsed between November 2022 and March 2023. Reports suggest that Chipper Cash’s valuation was marked down, and the company raised $25 million in convertible debt to conserve cash and extend its runway in a challenging fundraising environment.
Chipper Cash remains optimistic about its business, stating that it will be profitable in a few months. However, the company’s recent struggles highlight the difficulties faced by fintechs in maintaining growth and stability amid changing market conditions.
