According to a publication from Techcabal, Chipper Cash, the Africa-focused financial technology unicorn, has terminated the employment of 15 individuals from different departments in its fourth round of layoffs in the past year. The majority of the impacted employees are part of the company’s team in the United States.
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Chipper Cash mentioned to TechCabal, “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 . “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.
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.
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.
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.
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.
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