In 2021, African money-transfer startup Chipper Cash was valued at $2.2 billion. However, it struggled to adapt to the funding collapse in 2022, resulting in layoffs and a deep valuation cut. The company, co-founded by Maijid Moujaled and Ham Serunjogi, is now focusing on profitability in an attempt to weather the storm.
Layoffs and Valuation Cuts
The layoffs at Chipper Cash began with the dismissal of four recruiters in July 2022, followed by seven quality assurance engineers two months later. In December, around 10% of the company’s workforce received abrupt layoff notifications via personal email accounts. The cuts deepened further, with Chipper ultimately reducing its staff by about 30%. This was a stark contrast to the company’s previous reputation for valuing empathy and its Forbes recognition as a promising fintech startup.
Failed Acquisition Attempt
In February 2023, Zepz, a UK-based money-transfer company, approached Chipper Cash with an acquisition offer. Zepz proposed paying 5% to 10% of its stock to acquire Chipper, which faced financial challenges. The talks broke down due to disagreements about financial information sharing. This incident highlighted the challenges of valuing fintech companies in a volatile market.
Shift in Strategy and Focus
Chipper Cash had experienced rapid growth, amassing five million registered users across seven African countries in just four years. However, its growth-at-all-costs strategy came to a halt as interest rates rose and the stock market declined. The company had to pivot towards profitability and cost-cutting while trying to maintain employee morale.
CEO’s Approach and Challenges
Ham Serunjogi, Chipper’s CEO, had focused on rapid expansion, but the changing market dynamics required a shift. He emphasized that profitability became a priority as investors became more cautious. Serunjogi faced difficult decisions, including layoffs, and was torn between accountability and empathy.
Strategic Changes and Return to Basics
Chipper Cash scaled back its marketing efforts and aimed to focus on profitability. It aimed to attract more users by offering U.S. dollar-denominated accounts to African customers, particularly freelancers. While crypto was once a growth driver, the company was going back to basics to offer stable financial services in a challenging market.
The Path Forward
Despite facing significant challenges, Serunjogi remains optimistic and highlights the company’s achievements. Chipper Cash has restructured its operations, shifted its focus to Africa, and made strides toward profitability. The experience serves as a lesson for fintech startups, emphasizing the importance of balancing growth with financial sustainability and making tough decisions when necessary.
Akinyinka Akintunde stands out as an exceptional leader catalysing transformative change a…