A pair of twentysomethings from Uganda and Ghana thought there was a fortune to be made bringing transnational monetary providers to Africa’s 1.2 billion folks. With 5 million customers, San Francisco-based Chipper Money is simply getting began.
It was the summer season of 2018, and Ham Serunjogi, a 24-year-old Ugandan immigrant, thought the pitch he was making to a Palo Alto enterprise capital agency was going properly. He had defined how his fintech startup, Chipper Money, would allow African shoppers to ship cash to one another, throughout nationwide borders, extra cheaply and simply than the antiquated banking system—a kind of Venmo for the continent.
Then got here a query from one of many companions: “Why don’t you go search for donations and grants to fund this?” As a result of, Serunjogi replied, this will likely be a profit-making enterprise. The clueless associate continued: “Why don’t you discuss to Unicef or an impression investing agency?” Serunjogi discreetly declines to call the agency, or to say which VC later informed him that “no matter what the metrics are, I’ve to use a reduction to this enterprise as a result of it’s in Africa.”
Comply with the Cash: Chipper president Maijid Moujaled and CEO Ham Serunjogi of their San Francisco headquarters, the place they situated for entry to enterprise capital.
Ethan Pines for Forbes
These recollections nonetheless sting, although Chipper Money has now raised $300 million from a roster of blue-chip VCs, most just lately in November at a $2.2 billion valuation. “These have been issues I’d must take with a straight face. But it surely was outrageous, and it nonetheless is,” Serunjogi says from the San Francisco workplace the place he, cofounder Maijid Moujaled and almost a fifth of the corporate’s 350 staff are primarily based. The 2 founders every have an estimated 10% stake in Chipper, translating into paper fortunes north of $200 million.
Sheel Mohnot, a former associate at 500 Startups—Chipper Money’s first backer—chalks up some early investor resistance to ignorance about Africa. “Nobody was investing in Africa on the time,” he says. That has modified. Per CB Insights, enterprise capitalists invested $1.5 billion in African fintech firms final 12 months, up sevenfold from 2020. Sub-Saharan Africans immediately have 605 million registered cell cash accounts—with which they’ll ship money through textual content message—up from 469 million in 2018. That makes the realm fertile floor for extra superior client monetary apps.
4 years after its founding, Chipper Money has 5 million registered customers in seven nations, together with Uganda, Ghana and Nigeria. It provides not solely low-cost cash transfers however invoice fee, crypto buying and selling and the flexibility to purchase U.S. shares. Excluding crypto transactions, it booked greater than $75 million in income in 2021, in contrast with $18 million in 2020.
The thought for Chipper Money was seeded when high-school-age Serunjogi noticed the issues his father encountered attempting to maneuver cash via Africa’s ossified banking system. Serunjogi’s household lived in Gayaza, a Ugandan city 10 miles exterior Kampala, the capital. His mother and father owned a farm, and his father additionally ran an IT operation serving to native companies arrange networks. Although hardly wealthy, the household despatched Serunjogi and his two brothers to a non-public highschool and enrolled them in a aggressive swim membership. In 2010, Serunjogi, then 16, made the Ugandan Youth Olympic group. After having issues finishing a financial institution switch, his father was compelled to fly to South Africa with an envelope full of money to pay his son’s swim coach whereas they have been coaching there.
After highschool, Serunjogi adopted his older brother to Grinnell, a small liberal arts faculty in Iowa identified for its sturdy teachers, the place each swam varsity. At Grinnell he met Moujaled, a Ghanaian pc science main who had began a preferred pupil coding group. Virtually instantly, the 2 started speaking about creating an African cash switch app. However first they needed real-world tech expertise and wanted work visas. So throughout his junior 12 months Serunjogi despatched chilly emails to Mark Zuckerberg and Sheryl Sandberg and snagged an internship with Fb, which become a full-time job in Dublin after he graduated in 2016.
Within the spring of 2018, Serunjogi texted Moujaled, who was working as a software program engineer in San Francisco, to say it was time to get going. Serunjogi give up his job and moved into Moujaled’s studio condo, sleeping on an air mattress within the kitchenette. The 2 used their mixed financial savings of lower than $30,000 and Moujaled’s ongoing wage as seed capital. They launched a take a look at model of their app in July 2018, letting clients ship cash from Uganda to Ghana without cost.
They took pitches to greater than 50 VC companies till, in November 2018, 500 Startups agreed to take a position $150,000. Earlier than the papers have been signed, Mohnot wired $40,000 to Chipper after Serunjogi informed him he was about to overlook lease. “I will likely be eternally grateful to him for that,” Serunjogi says.
Chipper’s free, easy-to-use app was a giant enchancment over the obtainable alternate options. For instance, Kenya’s M-Pesa, which launched in 2007, prices 1% to 2% for a lot of home transfers.
By mid-2019 Chipper Money was obtainable in Uganda, Ghana, Kenya and Rwanda. It quickly expanded to Nigeria, Africa’s greatest market with greater than 200 million folks, and by the tip of the 12 months, it had 600,000 clients. It additionally launched a foreign-exchange markup payment of two% to five% to start out producing income. As bitcoin rose from $14,000 to $20,000 within the fall of 2020, Chipper started to let customers purchase and promote bitcoin and ether, establishing a second profitable line of enterprise: buying and selling charges. It reached a $2.2 billion valuation in late 2021, with funding from companies together with Sam Bankman-Fried’s FTX, Ribbit Capital and Bezos Expeditions. Transactions grew from $200 million within the first quarter of 2021 to $1.6 billion 12 months later.
All that development comes with added high-stakes challenges. One is liquidity: Chipper wants to verify it has sufficient funds in every nation to assist prompt transfers. When it doesn’t, transaction instances can sluggish to a full day or longer. Cash can clear up that drawback. A much bigger fear is competitors. Senegal-based startup Wave provides related providers (albeit in numerous nations thus far) and notched a $1.7 billion valuation final 12 months. Different remittance firms comparable to Remitly and Sensible don’t but let folks ship cash from one African nation to a different, however there’s nothing stopping them from coming into the market.
For now, Serunjogi is concentrated on sustaining Chipper’s steep development, transferring to profitability—and serving to Africans whereas doing so. Prospects profit, he says, once they can transfer cash simply and have new methods to take a position and construct wealth. “I’m a deep believer within the position of entrepreneurship and capitalism in enhancing the lives of people that dwell in creating nations.”
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