African cross-border fintech startup Chipper Cash has raised a $6 million seed round led by Deciens Capital.
The San Francisco-based company offers mobile-based, no fee, P2P payment services in six countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda and Kenya.
"Southern Africa is an area we're looking to expand to in 2020," he told TechCrunch on a call. Chipper Cash won't yet disclose which countries that could entail.
The digital finance startup's had a busy 12 months in an eventful year overall for Africa's fintech scene. After going live in 2018, Chipper Cash raised $2.4 million in May 2019 in a seed round that included support from 500 Startups and Liquid 2 Ventures — co-founded by American football icon Joe Montana.
In September, Chipper Cash expanded into what is now arguably Africa's largest fintech market, Nigeria. With its latest round, the startup has raised more than $8 million in seed capital. Participants in the $6 million financing include previous investors, and a few new backers, such as Boston-based Raptor Group.
The fintech company, co-founded by Ghanaian Maijid Moujaled, now has more than 600,000 active users and has processed more than 3 million transactions on its no-fee, P2P, cross-border mobile-money payments product, according to Serunjogi.
Maijid Moujaled and Ham Serunjogi
The startup also runs Chipper Checkout: a merchant-focused, fee-based C2B mobile payment product that generates the revenue to support Chipper Cash's free mobile-money business.
The startup's planned move to Southern Africa — home to the continent's second-largest and most advanced economy of South Africa — will place Chipper Cash in all three corners of the Africa's triangle of leading digital finance markets.
There are hundreds of payments startups across Africa looking to bring the continent's large unbanked and underbanked populations onto mobile finance applications.
Some products, such as M-Pesa in Kenya, have succeeded in reaching tens of millions. However, one characteristic of successful African fintech products is that their use has been geographically segregated, with few apps able to scale widely across borders.
Chipper Cash touts its ability to grow its P2P product in several countries in 2019, including Nigeria.
Serunjogi explained the imperative to move to the West African country earlier this year. “Nigeria is the largest economy and most populous country in Africa. Its fintech industry is one of the most advanced in Africa, up there with Kenya and South Africa,” he told TechCrunch in May.
Apparently a number of actors were on the same wavelength when he said that, as Nigerian fintech gained $360 million in VC in November — the equivalent of roughly one-third of all the startup capital raised in Africa in 2018, according to Partech stats.
Part of this venture influx was directed to potential Chipper Cash competitors.
In two separate rounds, Chinese investors put $220 million into OPay and PalmPay — two fledgling payment startups with plans to scale in Nigeria and the broader continent. That money dwarfs rounds raised by other P2P-focused fintech companies, such as Chipper Cash.
On how the startup will compete with these new players with big coffers, Serunjogi points to Chipper Cash's gratis-payment structure, among other factors.
"Money doesn't buy product market fit. It doesn't buy ultimate success in this space," he said.
"By offering our product for free, we're not in a pricing war or competing on a dollar-to-dollar basis. We're in a pure utility war on who can provide the most value to our users. We're quite comfortable with our position, and our long-term value proposition will speak for itself over time," Serunjogi added.
At the end of 2020 we can review where Chipper Cash and competitive platforms stand on country reach and volumes in the startup race to scale digital payments across Africa's 1.2 billion people.