Mr Chapman says: 

“Despite the crises at Credit Suisse, Silicon Valley Bank, Signature Bank, First Republic Bank and rumours circulating concerning Deutsche Bank, central banks have recently increased interest rates.

“Thanks to demographic pressures creating labour shortages, some inflationary pressure is likely to remain a threat, meaning interest rates are likely to remain permanently higher than pre-Covid levels.

“There are important implications of higher interest rates when some banks are simultaneously in crisis for the supply chain.

“The era of cheap and plentiful cash appears to be over. Under such circumstances, organisations must ensure their supply chain supports cash flow as much as possible.

“The greater importance of cash flow to the supply chain means organisations are likely to put much greater emphasis on trying to restrict the geographical spread of the supply chain.

“When products are being transported, cash is tied up, and if they are shipped over long distances, cash flow can be enormously disrupted. During the period when interest rates were close to zero and credit was plentiful, the above issues were important but not as important as they are in an era of higher rates.

“As a consequence, we expect organisations to put greater emphasis on sourcing or manufacturing products in regions as close as possible to where the main market lies.

“The new emphasis on local manufacturing is an opportunity for countries like Mexico, manufacturing products for the US market, and Poland, manufacturing products for the Western European market.

Simultaneously, advances in automation technologies mean that the cost of labour is likely less important a factor than before, and we may see a shift in manufacturing to within the US and centres in Western Europe.

“And although labour shortages will mitigate the shift in manufacturing, automation technologies mean this barrier is not likely to be prohibitive.”

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.