Less than one month ago, payments firm Chipper Cash, which runs its operations in Africa but is headquartered in the US, fired a third of its workforce due to financial struggles. The layoffs affected employees across various departments, including engineering, crypto, marketing, and customer support.
At that time, the company’s CEO, Ham Serunjogi, stated that the decision to downsize had been difficult, but it was necessary to ensure the company’s long-term viability. Chipper then said that it remained committed to providing affordable financial services to people across Africa.
The COVID-19 pandemic has had a significant impact on the global economy, and many businesses have had to make difficult decisions to stay afloat. Fintech startups like Chipper Cash have been particularly affected, as their business models rely heavily on digital transactions and mobile banking, which may have been disrupted by the pandemic.
In an internal memo sent to Chipper Cash employees, the CEO mentioned that the company would remain optimistic about its future prospects and its ability to weather the storm and emerge stronger on the other side.
However, this might not be the case because Chipper Cash is now considering selling its business, or getting access to new investments.
According to a report first published by Bloomberg, unnamed insiders have revealed that Chipper Cash had been exploring its options before SVB’s recent collapse. The company has allegedly received various merger and acquisition proposals from different parties, which have been evaluated to varying degrees. The sources also noted that no final decisions have been made, and the company may choose not to pursue any options.
Chipper Cash reportedly stated that it had never intended to be acquired, although it says has been common practice for them to receive such proposals. The firm had raised $250 million in 2021 in a funding round led by Silicon Valley Bank (SVB) and FTX (both have since collapsed), which valued the company at approximately $2 billion.
Although SVB collapsed last week, the company reiterated that its global customer operations would not be impacted in a post published by its CEO. Chipper Cash has a diverse group of investors who are supportive of its long-term business vision, and it has multiple banking relationships in the US.
SVB’s deposit insurance is fully guaranteed by US federal banking officials, which should alleviate concerns for clients.