African cross-border fintech, Chipper Cash has raised a $6 million seed round led by Deciens Capital. The development is to expand its footprint across the African continent, with the Southern African region marked as the next hunting ground.
The San Francisco-based firm offers mobile-based, no fee, P2P payment services in six countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda and Kenya.
The company expanded into Nigeria three months ago, a year after its establishment, and has raised $6 million from previous investors like Deciens Capital and new backers like Boston-based Raptor Group.
It had previously raised $2.4 million in May 2019 from capital ventures like 500 Startups and Liquid 2 Ventures, which was co-founded by American football legend, Joe Montana.
Essence of recent fundraising: Chipper Cash plans to expand its operation across Africa, and intends to set up camp in Southern Africa. Although the company didn’t disclose the country it aims in the region, with South Africa being the second-largest economy in Africa and boosting of a ripe tech market, one won’t be surprised if Chipper Cash set base there.
While speaking about the ambition of the startup, its Chief Executive Officer, Ham Serunjogi told Tech Crunch, “Southern Africa is an area we’re looking to expand to in 2020.” South Africa will make more sense as the country has the highest mobile penetration in Sub-Saharan Africa with 61%, well ahead of Nigeria that accounts for 32%, according to Geopoll’s report.
Chipper Cash makes an inroad into a new market once it raises funds. It did the same in September when it expanded its services into Nigeria’s tech space after securing the $2.4 million.
The San Francisco-based startup appointed co-founder of Gokada (Lagos-based ride-hailing startup), Abiodun Animashaun to run its operation in Nigeria as the Country Manager.
Meanwhile, Fintech’s popularity in Nigeria is growing beyond control. The market is becoming saturated with the likes of Paga, Flutterwave, OPay, Palmplay and other unpopular fintech platforms competing for the same market to service about 40 million smartphone users, according to Statista.
So, movement across Africa’s tech space is expected to expand revenue opportunities for Chipper Cash. The continent offers a customer base of about 123.7 million (inclusive of Middle East population) smartphone users. The startup already has offices in Ghana and Kenya, both of which accounts for 35% and 30% mobile penetration in Africa. Senegal records 34% behind South Africa.
Speaking on how the company intends to compete, Serunjogi said, “Money doesn’t buy product-market fit. It doesn’t buy ultimate success in this space. 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.”