Reports recently broke that fintech company backed by Silicon Valley Bank and cryptocurrency exchange, FTX, Chipper Cash, was considering being sold off or seeking new investors.
A spokesperson disclosed to Bloomberg that the development was already being discussed privately before the SVB’s closure, hence, not the reason for this. It was also revealed that the fintech might choose to go ahead or not.
In response to this, Chipper Cash told Bloomberg that the news is false.
“It’s been fairly common practice for us to receive various M&A proposals from different parties, which we evaluate to varying degrees. That being said, we have never sought to be acquired.”
Considering that the unicorn raised $150 million in a Series C extension round in 2021, valuing it at over $2 billion, this news left a lot of us wondering. Minds shifted to the fact that the startup might have been affected by SVB’s closure for the same reason that FTX was affected – withdrawal crunch.
Emphasizing the closure of SVB having little or no effect on the fintech, Ham Serunjogi, Chipper Cash CEO said: “Given the scale and complexity of our global operations, Chipper Cash maintains multiple banking relationships across the world – including multiple within the United States. As such, we had a very limited amount of money (only about $1M) held in our SVB account at the time the bank was taken over by the California regulator. We have already received confirmation from the FDIC that we can expect about half the funds back by Monday, March 13th 2023. Furthermore, there was absolutely no impact on our customer operations around the world.”
Speaking further, he said: “From a financial perspective, it doesn’t really change anything. SVB made their investment in Chipper in 2021 and we received those funds as soon as that round closed. What is happening now doesn’t change that. Additionally, SVB wasn’t the only investor in that round – we had several other new and existing investors participate in the $100m round – and SVB owns a very small part of Chipper ~2%. Chipper is very fortunate to have a very broad and supportive investor base that has supported us from our earliest days and continues to do so today.”
Chipper Cash enables users send and receive money across Africa seamlessly, with free transfers and affordable cross-border rates.
Having garnered over 5 million users since inception in 2018, Chipper Cash affirms to have issued 300,000+ visa cards and has a total process volume per quarter of more than $1.5 billion.
The uncertainty in the tech and startup landscape which started in 2022, seems to be ushering in some form of difficulties in various sectors.