Our investment notes for Chipper Cash a cross-border mobile payments solution for Africa
TEN13 has completed it’s 5th investment into exciting African fintech Chipper Cash, who’s mission is to make sending money across Africa as fast, easy and safe as possible. We’re excited to join their latest US$13.8m Series A round as announced on TechCrunch here.
Growing up in Africa (Zimbabwe), I saw the problems first-hand of poor financial infrastructure and limited financial access. The transfer of money within country in Africa is hard and transferring money across borders is even harder. There are limited solutions available and either involve legacy providers with exorbitant fees (think: Western Union) or unofficial and unregulated markets which increase risk (think: black market dealing).
I met Ham and Maijid in early 2019 in San Francisco, and after hearing them talk about their plans — it was clear of the potential opportunity they were working on. Chipper Cash has the vision to create and connect an international cross-border payments network across Africa, making the US$300bn transferred annually across mobile money providers and currencies as seamless as sending a text message. They are a payments company, headquartered in the US, that is building the cash app of Africa like WeChatPay (China), PayTM (India), Venmo & CashApp (US).
We invested in their Seed Round lead by Deciens in February 2019 post 500 Startups graduation and followed-on in their US$6m post-seed financing round in October as reported by TechCrunch. Having seen them surpass 1.5 million users, increase their monthly transaction volume to over US$100m per month and become the #1 Fintech app in the Play Store in Nigeria, we are back again to triple down on Chipper Cash in their Series A through our new investment brand TEN13
High transaction costs: Sub-Saharan Africa (SSA) has the highest transaction costs anywhere in the world. This is because organisations such as Western Union and MoneyGram have extensive agent networks and that need to be paid at both ends of the transactions plus take their own fee, and are usually via cash-based transactions. This all results in material costs to the end-user and a high friction process.
Interoperability: Transferring money is a painful process because most mobile money providers do not integrate with each other and you cannot transfer money between mobile wallets. Governments in Africa have been pushing mobile money providers to become interoperable but this process is still in its infancy. Most mobile money providers are still not interoperable and the process of transferring money both locally and abroad is cumbersome.
Chipper Cash has developed a mobile payments platform that sits a layer above the mobile money providers, allowing users to seamlessly pull money from their mobile money accounts and then transfer that money across borders and across different mobile money wallets in a seamless manner.
Users can download the app, create an account, and immediately begin syncing each of the mobile money wallets and bank accounts, bringing everything into the one platform. Once onboard, the experience is seamless for transferring funds — their product experience is reflective of their plans; making the exchange of payments as easy as sending a text message.
They’ve started with cross-border payments, but are expanding into other exciting verticals soon — watch this space.
We believe that it is a great time for Chipper to be going after this market. They are benefiting from the rising tide of smartphone penetration and financial access as more and more people gain access to mobile money and mobile transactions. This trend is growing the mobile market in SSA by 5% annually (20m new users year) and is forecasted to reach 600m Sub-Saharan Africans by 2025 (or 2/3 of the African continent), with the fastest growth occurring in Nigeria (Chipper Cash’s largest market) at 19% per year.
We love backing founders who have strong technical nous, a deeply product-centric focus and ambition to execute on a truly world-changing vision. Having spent time with co-founders Ham Serunjogi — CEO (ex-Facebook) and Maijid Moujaled — Head of Product (ex-Yahoo, Flickr & Imgur) — we were sold that the co-founding duo had the right intensity, skillset and ambition to change the way Africa transacts money across borders.
The founders are homegrown in Africa (Uganda and Ghana), but have first-world experience in leading technology companies and are extremely passionate about their mission to solve this problem on their home continent.
They have a compelling story to tell and are attracting world-class talent to their team as a result. Here are just some of the amazing talent they have brought onboard:
We are super excited to be partnering with Chipper Cash once again. It is rare to see a company which so regularly outgrows its own forecasts and continues to scale month after month. On a personal note, it is rarer still in VC to invest in a company which hits so close to home. I look forward to using Chipper on my next family trip to Africa.
Safe Travels, Stew Glynn, Partner @ TEN13.
Investor Spotlight Series - Daniel Johnson
Introducing our Investor Spotlight Series, highlighting the leading supporters of startups in the Australian ecosystem. First up, Daniel Johnson, a successful founder turned angel investor with over 70 startups in his portfolio so far.
AFSL Disclaimer TEN13 Management Pty Ltd (TEN13 Management) is a corporate authorised representative of Boutique Capital Pty Ltd (BCPL) AFSL 508011, CAR Number 1298306. TEN13 Nominee Pty Ltd (TEN13 Nominee) is a corporate authorised representative of BCPL, CAR Number 1298307. Together, TEN13 Management and TEN13 Nominee are referred to as we, us, or our in this document. To the extent to which this document contains advice it is general advice only and has been prepared by us for individuals identified as wholesale investors for the purposes of providing a financial product or financial service, under Section 761G or Section 761GA of the Corporations Act 2001 (Cth). The information herein is presented in summary form and is therefore subject to qualification and further explanation. The information in this document is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking into account personal investment objectives, financial circumstances or particular needs. Recipients of this document are advised to consult their own professional advisers about legal, tax, financial or other matters relevant to the suitability of this information. The investment summarised in this document is subject to known and unknown risks, some of which are beyond our control and our directors, employees, advisers or agents. We do not guarantee any particular rate of return or the performance, nor do we and our directors personally guarantee the repayment of capital or any particular tax treatment. Past performance is not indicative of future performance. The materials contained herein represent a general summary of our current portfolio construction approach. We are not constrained with respect to any investment decision making methodologies and may vary from them materially at its sole discretion and without prior notice to investors. Depending on market conditions and trends, we may pursue other objectives or strategies considered appropriate and in the best interest of portfolio performance. There are risks involved in investing in our strategy. All investments carry some level of risk, and there is typically a direct relationship between risk and return. We describe what steps we take to mitigate risk (where possible) in the investment documentation, which must be read prior to investing. It is important to note that despite taking such steps, we cannot mitigate risk completely. This document was prepared as a private communication to clients, is confidential and is not intended for public circulation or publication or for the use of any third party, without our approval. Whilst this report is based on information from sources which we consider reliable, its accuracy and completeness cannot be guaranteed. Data is not necessarily audited or independently verified. Any opinions reflect our judgment at this date and are subject to change. We have no obligation to provide revised assessments in the event of changed circumstances. To the extent permitted by law, BCPL, we and their directors and employees do not accept any liability for the results of any actions taken or not taken on the basis of information in this report, or for any negligent misstatements, errors or omissions. TEN13 Disclaimer TEN13 Nominee may, from time to time hold securities referred to in the information herein and may trade in these securities as a nominee (either as principal or as agent). We may receive commissions, fees or other forms of remuneration from transactions involving investments referred to in the materials. By accepting the materials contained herein, you agree to indemnify TEN13 Management, TEN13 Nominee, Transition Level Investments Pty Ltd ACN 154 457 155, TEN13 Holding Pty Ltd ACN 634 042 783, and Birkdale Holdings (Qld) Pty Ltd ACN 120 407 981 ATF the Baxter Family Trust and any of their respectivedirectors, officers, employees, consultants, advisors or agents (TEN13 Parties) against any claim, liability, action, damage, loss, cost or expense sustained by any of them arising from or as a result of any breach by you of the confidentiality obligation under this disclaimer. The TEN13 Parties: disclaim and exclude all liability for all losses, claims, damages, costs and expenses of any nature arising out of or in connection with the materials contained herein (or any accompanying or subsequent information); and do not have any obligation to advise any person if they become aware of any inaccuracy in, or omission from, the materials contained herein (or any accompanying or subsequent information).