The decision affected at least two executives, people familiar with the matter said.

“Our core focus has always been our African markets, where as you know, we have some of the largest consumer products on the market,” Ham Serunjogi told TechCabal via email. “Additionally, with regards to our US operations, we will continue to offer our product as we did in the past and I expect those services to resume soon,” he added.

The fintech company, backed by Jeff Bezos’s Bezos expedition, laid off 15 people and slashed salaries by 25% for its UK and US employees in December 2023 but insisted its business was “doing very well.”

While Chipper told US customers to withdraw their funds urgently, Serunjogi told The Information the suspension had a “very small impact on very few people, relatively speaking.”

“But for context, the US has never been a focus for us – we have offered that product there as an extension of our African services” Serunjogi told TechCabal.

In the past year, four rounds of layoffs at the company have affected several high-profile executives, including Alicia Levine, the Chief Operating Officer and Leon Kiptum, its country director for Kenya. 

Chipper Cash had previously cut the salaries of its U.S. and U.K. staff by 25% but allowed them to work four days per week. 

Before suspending its U.S. operations, Chipper Cash told customers to withdraw funds from their Chipper wallets.

Once valued at over $2 billion, Chipper Cash has faced challenges in the last two years as the global economy slowed and venture capital funding dried up. 

Despite raising $300 million between 2019 and 2021 from investors like Deciens Capital, Ribbit Group, FTX, and Silver Valley Bank, the company began experiencing financial losses. One source mentioned that its monthly burn rate gradually grew to $7 million per month, possibly peaking in May 2021 after the Series C funding round.

*This is a developing story

*Correction: The headline has been edited to reflect that Chipper will respond to comments.

Chipper Cash confirmed the new layoffs in a statement to TechCabal, claiming its business was “doing very well” despite the headwinds reported over the last few months.

“We constantly look to ensure we have as much efficiency as possible within our global organization, and only a small number of roles were impacted by the minor restructuring,” a spokesperson for Chipper Cash said in an email to TechCabal. “No roles in Africa were affected—this year we have expanded teams on the continent. Our business is doing very well and will be profitable in a few months.”

Beyond the layoffs, Chipper Cash also cut the salaries of its remaining US and UK employees, said two sources connected to the company.

Chipper did not respond to TechCabal’s questions about the salary cuts. 

Chipper Cash was founded in 2018 by Ham Serunjogi, originally from Uganda, and Ghanaian Maijid Moujaled. The duo set out to digitize remittance payments into Africa.

The company operates a cross-border payments service that allows Africans to send and receive money from eight countries, including Nigeria, Africa’s biggest economy by population and GDP, South Africa, the UK and the US. Chipper Cash styled itself as a zero-fee payment platform, allowing users to make peer-to-peer transactions without charging a commission upfront. The company made revenue from the exchange rate arbitrage involved in international fund transfers. In addition to global fund transfers, the service helps merchants accept payments online.

Chipper Cash also offers other products that allow everyday consumers to trade cryptocurrency, pay bills, buy airtime and shop online directly from a digital wallet or a virtual debit card powered by Visa, the American card company. According to information on the startup’s website, users in Nigeria and Uganda can also buy and sell fractional stocks in publicly traded companies listed on American stock exchanges.

Since it launched, Chipper Cash has raised over $300 million in venture funding across multiple rounds that originally valued it at $2.2 billion in late 2021. Some of its prominent investors include fintech investor Ribbit Capital; Bezos Expeditions, the venture fund of Amazon founder Jeff Bezos; Silicon Valley Bank; and FTX, the failed crypto exchange.

Buoyed by the pandemic, digital payments accelerated in Africa, fueling Chipper Cash’s growth in the region. By 2021, the company’s revenue had grown four times to $75 million, compared to $18 million in the previous year, according to Forbes. Company insiders say its annual revenue topped $100 million by the end of 2022.

Chipper Cash claimed it had over 4 million users at its peak in 2021. Now, the company boasts over 5 million downloads on the Apple and Google app stores after splashy marketing campaigns, including a partnership with Grammy-award-winning musician Burna Boy, which industry insiders say could be worth as much as $1 million.

Backed by hundreds of millions of dollars, Chipper Cash had adopted a “growth-at-all-cost” mindset to justify its unicorn valuation in a challenging macroeconomic environment like Africa. The startup hired aggressively in the UK and US, where it opened an office in San Francisco. It recruited 250 new employees between 2021 and 2022, doubling its workforce to 450.

But Chipper Cash’s growth spree began to cool as higher interest rates in the US to tackle inflation put pressure on companies and sparked fears of a possible recession. Venture funding dried up, and startups, including Chipper Cash, faced urgency to conserve costs. The fintech company has also seen renewed competition from rivals, including Flutterwave, Eversend and LemFi, promising to simplify domestic and international money transfers.

In late 2022, Chipper Cash cut around 180 jobs, representing 40% of its workforce. By February 2023, at least six of its senior leadership team members had left the company, including its chief operating officer, chief information officer, chief revenue officer, global head of marketing and its chief compliance officer.

“The last two years were a period of rapid growth and scaling for us as a business and, to reflect this, our global headcount grew by around 250 people,” said Chipper Cash CEO Ham Serunjogi in February after the second round of job cuts. “However, given the macroeconomic climate, we are narrowing our current focus to core markets and products.”

The startup also ditched plans to expand to new markets in Europe and the Middle East. And with that organizational pivot, Serunjogi explained, “The reality is that we, unfortunately, need a smaller team at Chipper.”

Chipper Cash has faced additional financial pressure after two of its prominent investors, FTX and Silicon Valley Bank, collapsed between Nov. 2022 and Mar. 2023. While the startup has reassured that its business is safe, a look into FTX’s financial statement showed it had marked down Chipper Cash’s valuation from $2 billion to $1.25 billion. Other reports claim the startup had slashed the value of its employee stock options by as much as 70%.

Chipper Cash has also reportedly raised $25 million in convertible debt from an undisclosed investor that would convert at a $450 million valuation in the event of an acquisition or a new fundraise.

The company is looking to conserve cash and extend its runway in a difficult fundraising environment.

Chipper Cash, one of Africa’s most valuable fintech startups, is partnering with global payments company Visa on strategic partnerships ranging from card issuance to product marketing.

Both companies have worked together since 2021 on the rollout of Chipper Card to support consumer payments in Chipper Cash’s operating markets, especially in Africa. The new partnership builds on this existing arrangement and will see both fintechs expand collaboration on card issuance while also joining forces across regulatory and functional areas such as Visa licensing and marketing on the back of  Chipper’s expertise and Visa’s network capabilities.

Chipper Cash, who have reportedly issued one million virtual cards, hopes to leverage Visa’s experience and investment across more areas of its business, especially as the American payments network expands its footprint in Africa. Last December, Visa pledged to invest $1 billion in the continent over the next five years, a plan that could include acquisitions and new investments in regional startups.

“Today’s announcement means we can deliver on our priorities at a faster pace than we could do alone; harnessing Visa’s global reach to enable us to continue to bring the very best products and services to customers,” said Brett Macgrath, Chipper Cash’s Chief Product Officer.

Visa said it is “thrilled” to double down on its Chipper Cash partnership. “This deepens our support in the growing demand for digital financial services in Africa and driving meaningful impact across the continent,” said Meagan Rabe, Visa’s Senior Director of Fintechs in  Sub-Saharan Africa. “We look forward to continuing our work with Chipper Cash to redefine and expand the boundaries of financial accessibility and convenience.”

The latest announcement comes just two months after Chipper announced the launch of Chipper ID, the AI-driven verification and onboarding tool built specifically for the African continent. The company is now betting that its strategic partnership with Visa will help it scale its card business and verification services within Africa. Chipper Cash said it serves over five million customers across Africa and the US.

Chipper Cash has had a rough last couple of months as it consolidated its resources during a harsh funding winter.  Between November 2022 and March this year, two of the startup’s most prominent investors — failed crypto company FTX, and Silicon Valley Bank — collapsed. In June, TechCabal reported that Chipper Cash laid off at least ten staff members in the company’s third round of layoffs over the previous year. Per our sources, those affected included Hasan Luongo, the vice president of global marketing, Alicia Levin, the global chief operating officer, and Leon Kiptum, the country director for Kenya. Now the company is looking to stay on a growth path in a shaky macroeconomic environment.

Editor’s note: This article has been updated to include that Chipper’s VP for global marketing was affected by the layoffs.

Last week, the African fintech startup Chipper Cash laid off at least ten staff members in the company’s third round of layoffs in under one year. A source told TechCabal that the vice president of marketing, Alicia Levin, the global chief operating officer, and Leon Kiptum, the country director for Kenya, were part of those affected by last week’s layoffs. Several product managers were also fired. Chipper Cash acknowledged these layoffs in an email to TechCabal but did not disclose the exact number of affected employees. Part of Chipper’s email said, “As part of our previously announced restructuring as an organization to focus on core products and markets, we recently made redundant a very small number of roles across our global teams.”

This marks the third time that Chipper Cash has trimmed its workforce. Toward the end of 2022, ChipperCash fired over 50 employees. The layoffs affected staff members across different departments. At that time, the reasons behind the company’s decision to downsize its workforce remained unclear. The move raised concerns about the potential impact on the company’s operations and prospects.

In February 2023, Chipper Cash fired over 100 workers, affecting about a third of its workforce. According to insiders, Chipper Cash CEO Ham Serunjogi acknowledged to employees the significant challenges the company was facing. He justified the layoffs by citing the ongoing economic difficulties and the uncertainty surrounding the future. Ham added the importance of adaptability and responsiveness in the business environment, emphasizing necessary changes to ensure long-term success and outpace competitors.

Later, it would emerge that Chipper Cash would exercise careful resource management, prioritizing essential aspects of the business. This included streamlining efforts to concentrate on core markets and products to boost profitability and thrive in those areas. In March 2023, insiders disclosed that Chipper Cash had been exploring potential options before the collapse of SVB. The company allegedly received multiple merger and acquisition proposals from various parties, which were evaluated to different extents. However, no final decisions were made, and the company may have chosen not to pursue any options.

Chipper Cash reportedly clarified that it had never intended to be acquired. However, receiving such proposals was a common practice for them. In 2021, the firm raised $250 million in a funding round led by Silicon Valley Bank (SVB) and FTX, which have since collapsed. This funding round valued the company at approximately $2 billion.

What do you think about our stories? Tell us how you feel by taking this quick 3-minute survey.

See also: Customers report frozen accounts over illegal transfers from Flutterwave

Chipper Cash downplays SVB exposure, but new claims may show otherwise

The company has been in the news recently after reports that it had some money in Silicon Valley Bank. In a statement, the company said its exposure was only $1 million and that it would not affect its operations. Despite this, Fatu Ogwuche, the publisher of Big Tech This Week, disagreed with Chipper’s version of events, reporting that the startup had $3 million. Whatever the actual amount, US regulators’ decision to make all depositors whole means it may merely be an academic argument.

What is clear is that it may be a more challenging year than usual for Africa’s unicorns looking to raise money. TechCabal reported earlier that Flutterwave’s IPO plans may suffer a delay this year, with unconfirmed reports that the company may have to raise money at a lower valuation than $3 billion.

With the option of going public looking unlikely, Chipper Cash may suffer a slash in valuation if it raises money this year. Its previous valuation at its $250 million fundraise was $2 billion.

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13 MARCH, 2023

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Merry Monday

Good news for some people: you can now pay for Twitter.

Months after the subscription service was relaunched, Twitter Blue is now available in South Africa and Nigeria. 

In addition to getting to edit tweets and bookmark folders, the relaunched Twitter Blue service also comes with the coveted verified checkmark that tells people which users are better than the rest.

With discounts of 12% for Nigeria and 13% for South Africa, iOS and Android devices will pay flat rates of ₦5,000 and R200.00 monthly; while those subscribing to the web service will pay ₦3,650 and R144.99 monthly.

The annual subscription costs ₦38,500 and R1,519 for web, while those on iOS and Android devices will pay ₦52,900 and R2,099.

In today’s edition

• The World Wide Web3
• What’s happening in Silicon Valley?
• Customers accounts frozen from illegal Flutterwave transfers
• MTN Nigeria raises $271 million
• TC Insights: Funding African digital media
• Opportunities

THE WORLD WIDE WEB3

Bitcoin	$20,624	+ 1.95%
Ether	$1,477	+ 2.57%
BNB	$278	+ 0.91%
Solana	$18.22	+ 4.28%
Name of the coin Price of the coin 24-hour percentage change		Source: CoinMarketCap

* Data as of 14:30 PM WAT, March 12, 2023.

One of the world’s largest stablecoin operators, Circle, has confessed that it has $3.3 billion stuck in Silicon Valley Bank. Fortune reports that the company has now called for urgent rescue plans from the Federal Government. The revelation has also caused the price of its stablecoin token, USD Coin, to crash.

Echo VC, a pan-African VC firm, has announced a $8 million fund for blockchain-powered startups on the continent. TechCabal reports that the fund will be deployed to blockchain startups that are substantiating the utility of blockchain products and solving some of Africa’s pressing challenges.

Meta has dropped all its metaverse ambitions and is now working on a decentralised text-based social media platform. TechCrunch reports that the platform is Meta’s attempt to compete with Musk-owned Twitter and open-source social network host Mastodon. 

A Premier League star, Gustavo Scarpa of Nottingham Forest, lost £1 million ($1.2 million) investing in crypto and has now filed a lawsuit to get it back. The Mirror reports that the star used a crypto company called WLCJ to invest the funds for a 3.5%—5% interest rate, but the company is now dissolved. 

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WHAT’S HAPPENING IN SILICON VALLEY?

On Friday, news broke that the US Federal Deposit Insurance Corporation (FDIC) had shut down Silicon Valley Bank (SVB).

Here’s a quick breakdown of why this is a big deal.

SVB, the 20th largest bank in America, is the go-to bank for tech startups across the West. In 2019, right before COVID, the bank had about $60 billion from customers’ deposits—most of its customers being startups. COVID, however, brought a funding boom that doubled the startup funding for most regions including America, Europe and Africa. For SVB, this meant customers’ deposits grew from $60 billion in 2019 to $189 billion by 2022. 

Like all banks, SVB decided to invest some of this money. Its choice investment was mortgage backed securities (MBS) for which it invested—or paid—$80 billion at 1.25% for a 10-year term. Unfortunately, by 2023, the interest rates for MBS grew to 4.65%, which meant that SVB would lose $1.8 billion if it tried to sell the bonds, instead of holding them for the 10-year term. 

Side bar: Anyone who bought the bonds would be buying them at the 1.65% rate, not the 4.65% rate. Think of how 1 bitcoin in November 2021 was worth $65,000 and now it’s worth $20,000. 

Well, SVB decided to pack it in and sell the bonds. It planned to gain back the $1.8 billion it would lose via a capital raise from its shareholders. Unfortunately, it announced its $1.8 billion loss and its raise plans at the same time.

All its customers got spooked and most started requesting withdrawals. Unfortunately, though, SVB didn’t have the money to recoup. 

What happens now?

Yesterday, the FDIC and the US Federal Reserve announced that all deposits—insured and uninsured—will be protected. Depositors will reportedly be able to acceess their funds starting this week. “No losses associated with the resolution of Silicon Valley Bank will be borne by taxpayers,” the statement read.

This means everyone will get their money back as quickly as possible.

It is unknown at this time how many African startups are affected, but fintech Chipper Cash is one of the bank’s customers; SVB also invested in Chipper’s Series C round in 2021. Yesterday, the fintech announced that it had $1 million stuck in the hassle, but the FDIC had assured it that it would get half the funds back this week. The fintech also assured the public that customer operations were not affected.  VC firrm Future Africa also announced minimal exposure the bank.

ACCOUNTS FROZEN OVER ILLEGAL FLUTTERWAVE TRANSFERS

Last week, Techpoint Africa reported that fintech unicorn Flutterwave had suffered a hack by culprits who transferred about ₦2.9 billion ($6.3 million) from the startup’s account.

The fintech promptly denied the hack, stating that it only noticed and reported an “unusual trend in transactions”.

Several sources have, however, told TechCabal a different story. Court documents seen by this publication also show the fintech seeking an order to freeze 106 bank accounts—across 27 Nigerian banks and financial institutions—which had directly or indirectly received money from the illegal transfers. 

Alex Onyia, CEO of Educare, who first tweeted about the hack, told TechCabal that his company lost ₦8 million ($17,391) which was moved from his company’s Flutterwave account by the hacker. His bank, Access Bank, upon investigating, froze the account after noticing the large cash flow. 

Another victim, Ajeka Illiasu Opaluwa, who is the CEO of crypto exchange platform Pajek Signatures also reports that ₦1.6 billion ($3.4 million), which he received from a Chinese named William Atong Chen, for the sale of USDT, was tagged as part of the stolen Flutterwave funds by his bank. People who received money from Opaluwa also had their accounts frozen, including David Ofedu Audu who had five of his bank accounts affected. 

TechCabal also spoke to affected people who claim to have no connection to Flutterwave, including Henry Awaka whose Fidelity bank account was listed as the fourth beneficiary in Flutterwave’s suit. Awaka received ₦1,199,291 ($2,607) for the bulk sale of alcoholic drinks—his usual trade—but the amount marked him as a fourth beneficiary for the illegal transfer. 

So far, there are reportedly 108 victims with frozen accounts who are waiting on Flutterwave for an answer. The fintech is yet to respond to any requests for comments or explanations. 

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MTN NIGERIA RAISES $271 MILLION

MTN Nigeria is currently divesting its assets. 

Last week, the telco announced that it had raised ₦125 billion ($271 million) as part of its commercial paper issuance.

Side bar: Commercial papers are exactly what they sound like: expensive IOUs. They are unsecured loan instruments used by companies that need to raise money fast. 

In February, the telco announced its plans to raise ₦100 billion ($217 million) to support its working capital and general operating expenses. The Series 4 subscription had a 188-day tenor and was offered at 11%, while the series 5, with a 267-day tenor, was 12.50%.

While the company only sought ₦100 billion, it received a 125% subscription. The issuance was completed on March 1, 2023, almost a week after its scheduled date of February 23.

Stanbic IBTC Capital arranged the deal while Stanbic IBTC Capital, Chapel Hill Denham Advisory, Coronation Merchant Bank, FBNQuest Merchant Bank, and FSDH Capital were the dealers.

TC INSIGHTS: FUNDING AFRICAN DIGITAL MEDIA

Africa’s digital media sector is corresponding with the rising demand for online multimedia content consumption on the continent. Yet, most African digital media outlets have a funding problem.

In 2020, African digital media outlets earned 26% of their income from advertising, down slightly from 29% in 2019, with many relying on grant funding as their primary revenue source, according to a study. However, with an advertising-driven business model, the digital media landscape has not proven to be a fertile ground for investment, attracting a paltry amount of VC funding to scale.

For example, according to Quantum Media, VC investment in digital media plummeted in the US down to $115 million in 2021 from more than $1 billion in 2015, but not much came to Africa. This makes media outlets in Africa more likely to receive grants than raising VC funding from local and institutional investors. In 2022, there were shining lights in African digital media outfits like Big Cabal Media raising $2.3 million and Stears also announcing a $3.3 million seed round. Also, Ghana-based OMG Digital and Kenya-based Wee Media have raised $1.1 million and $400,000 in seed funding, respectively.

David Adeleke, a media analyst and publisher of Communiqué, believes African digital media companies should be raising venture capital, but it depends on the kind of products they can build at zero marginal cost to produce recurrent outsized revenues VC firms look out for. “African digital media outlets cannot generate outsized returns purely based on subscriptions and advertising, as they have to be able to make revenue at five or ten times the level when they first raised funding,” he said. “This paves the way to a clear and good exit path for them, like an acquisition within or outside the continent. Whichever the case may be, their options are still limited.”

Africa is projected to be one of the world’s major media consumers by 2030, according to data from Statista. This means the revenue drive of African digital media companies can be accelerated with high-growth digital products by going the extra mile to move beyond ad dependency and experiment with new technologies.

EVENTS: TECHCABAL AT 10

Here’s a list of all the Twitter Spaces we’ll be holding to celebrate our 10th-year anniversary.

• March 14—Beyond Funding: Meet the team leading TechCabal’s newsroom. Why is TechCabal telling the kinds of stories we are telling now, and how this thinking has influenced our expansion drive. How is TechCabal’s editorial leadership driving this? Register here. 

• March 16—Building newsletters readers want. How has TechCabal grown to build seven newsletter products, and what drove this growth? How does TechCabal measure success when it comes to its newsletter products, and what are its plans? Register here. 

• March 21—Meet the team telling African tech stories that matter. TechCabal captures the players, human impact and business of tech in Africa. We provide the content, reporting, data, and context to help the world understand how tech is changing Africa. Who are the journalists doing all of this important work? Find out here.

• March 23—What is the future of tech in Africa? In the last 10 years, the African tech ecosystem has evolved quickly. We know this firsthand at TechCabal. What does the future look like? Join us for an insightful conversation with Ola Brown, Stephen Deng, Hope Ditlhakanyane, and Ngozi Dozie where we answer these questions. Set a reminder here. 

• March 30—The role of the media in covering African tech. How can the media help Africa’s developing tech ecosystem? What responsibility does the media owe the ecosystem, and what can the media expect in return? Should the media only cover the good stories? Find out here.

IN OTHER NEWS FROM TECHCABAL

Why Zikoko’s website got a facelift, and the team behind it.

How to retrieve lost JAMB registration numbers in 2023.

OPPORTUNITIES

• The Jasiri Talent Investor Programme is looking for highly driven individuals with a history of achievement and/or entrepreneurial action who aspire to launch a high-growth venture. Apply by April 23.

• The Growth Africa Accelerator Programme is calling for applications from ambitious and committed entrepreneurs from Kenya, Uganda, Ethiopia, Zambia or Ghana with the potential to grow and create impact through their businesses. Apply now.

• The HiiL Justice Accelerator Programme is now open for applications from Kenyan startups with solutions that help people resolve their legal problems. Eight selected startups will receive $10,000 in equity-free funding as well as the chance to win up to $21,000 on Demo Day. Apply by March 31.

• Google has announced that the Google for Startups Black Founders Fund is now accepting applications from Black founders across the African continent. Apply by March 26.

• The Africa Business Heroes (ABH) Prize Competition, a philanthropic initiative sponsored by the Jack Ma Foundation and Alibaba Philanthropy, is calling for participation from Africa’s entrepreneurial talent. Apply by May 12.

• Rwandan startups have been invited to apply for the ZEP-RE InsurTech Programme, which will support scalable startups in creating new markets and optimising efficiency. Apply by March 15.

What else is happening in tech?

• Spotify introduces new features for creators and artists. 

• Carrefour risks $31 million penalty in Kenya over abuse of power allegations.

• South Africa is losing out on billions in online gambling taxes.

• Telkom partners with Clickatell to launch mobile messaging payments in South Africa.

TWEET ABOUT TC DAILY

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Written by – Timi Odueso & Ayomide Agbaje

Edited by – Kelechi Njoku

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This acquisition will allow Chipper Cash, which has a self-reported user count of 5 million, to add new online services and a new agent network to its offerings. This move is also an expansion strategy by the company into Zambia. 

According to Chipper Cash’s VP of Corporate Development, Laura Kennedy, Zoona’s acquisition will offer it “incredible innovation, a great partner network, complementary products and services, and talented in-country teams.”  For Zoona’s co-founder and CEO, Brett Magrath, this acquisition allows the two companies to combine their expertise to connect consumers and businesses across the continent while positioning themselves as the first choice provider of financial services for the people of Africa. 

Zoona pioneered the Zambian tech ecosystem when it was founded in 2008, developing the Tilt service that enables individuals and companies to pay and transfer to bank and money mobile providers in the country through cash, its digital channel, or its network of over 450 interoperable agents. The fintech, whose emergence coincides with the start of Africa’s mobile money industry, has processed over $3 billion worth of transactions since launch. In 2020, the Zambian company sold its business in Malawi to Cape Town-based payments company Mukuru, as it refocused its business to a B2B model.

CEO Ham Serunjogi founded Chipper Cash with Maijid Moujaled, who currently serves as the payment company’s President, in 2018 to offer fee-free personal and cross-border payment to Africa. Since then it has raised $300 million in venture capital funding and is now valued at $2.2 billion. Its services are available in Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya, as well as in the UK and US. 

“Bringing these companies together under the Chipper umbrella will mean we can open up even more borders, bringing quality financial services to life in more countries and connecting more people across the continent,” Kennedy said.  

Chipper Cash did not share the financial terms of the transaction. The acquisition deal is also subject to the approval of relevant authorities.

“It has come to the attention of the Central Bank of Kenya (CBK) that Flutterwave Payments Technology Limited (Flutterwave) and Chipper Technologies Kenya Limited (Chipper) have been engaging in Money Remittance and Payment Services without licensing and authorisation by CBK,” Matu Mugo, deputy director of bank supervision at the CBK, said in the circular. 

“You are therefore directed to immediately cease and desist from dealing with Flutterwave and Chipper,” the circular reads. 

This circular is coming a day after the apex bank said that Flutterwave and Chipper Cash are not licensed to operate in Kenya as remittance operators and payment services.  “Flutterwave is not licensed to operate as a remittance provider or for that matter as a PSB service provider in Kenya. They are not licensed to operate and therefore they shouldn’t be operating. We can also say the same for Chipper Cash,” CBK’s governor, Patrick Njoroge, said during a Monetary Policy Committee (MPC) meeting on Thursday, July 28.  

In a response to the CBK’s July 28 comment on July 28, obtained by TechCabal, Flutterwave had said that it entered Kenya through partnership with “banks and mobile operators licensed by the Central Bank of Kenya”. The company also claimed that it submitted an application to operate as a payment service provider in the country and has been in constant engagement with the CBK to ensure that it provides all the requirements for licensing and is consequently awaiting the issuance of the license.    

Kenyan banks were given a 7-week ultimatum, starting from July 29, to confirm compliance with the directives of the CBK. 

A few hours after yesterday’s news report was published, Flutterwave shared a statement with TechCabal via email.

In a statement shared with TechCabal, Flutterwave claims it entered the Kenya market like many other financial technology service providers– through partnerships with “banks and mobile network operators licensed by the Central Bank of Kenya.”

According to the statement, as its operations grew, in 2019 the company submitted applications for a Payment Service Provider license. “We have been in constant engagement with the Central Bank of Kenya to ensure that we provide all the requirements and we look forward to receiving our license,” the statement reads.    

The Central Bank of Kenya says Flutterwave and Chipper Cash are unlicensed

The Central Bank of Kenya (CBK) has said that Flutterwave and Chipper Cash are not licensed to operate in Kenya as remittance operators and payment services. 

“Flutterwave is not licensed to operate as a remittance provider or for that matter as a PSB service provider in Kenya. They are not licensed to operate and therefore they shouldn’t be operating. We can also say the same for Chipper Cash,” CBK’s governor, Patrick Njoroge, said during a Monetary Policy Committee (MPC) meeting on Thursday. 

Flutterwave launched operations in Kenya in 2016 after announcing its platform could process card payments, in partnership with Kenya’s KCB Bank,  denominated in Kenyan shillings and US dollars. Two years later, the Fintech unicorn launched its Barter app in Kenya. 

Chipper Cash raised $100m in a Series C round, with participation from Bezos Expeditions and 500 Startups, in 2021. The California-based Fintech provides P2P payment services across 8 African countries including Kenya, Ghana, and Nigeria. 

This announcement by the CBK  is the latest a series of legal run-ins between foreign technology companies such as  Flutterwave and the Kenyan government. 

Earlier this month, Kenya’s Asset Recovery Agency (ARA) accused Flutterwave of money laundering and fraud—allegations that the company denied—and succeeded in convincing a Kenyan court to freeze $52.5 million in 62 bank accounts belonging to the company.  The ARA also accused Flutterwave of operating in the country without authorisation from the CBK. 

The CBK’s comment has raised questions about Kenya’s lengthy licensing timelines and processes. In a series of tweets shared on his public account, Osaretin Victor Asemota, revealed that legacy fintechs that have operated in Kenya for over a decade only received their licenses in the last 2 years 

According to some industry experts, this newly-found energy in regulating fintechs can be traced to the release of the Kenya National Payments System (NPS) Vision and Strategy 2021-2025 (PDF) in 2020—a 5-year plan to digitise the country’s payment landscape and establish regulatory standards that make innovation conducive. 

“The truth about fintechs and how long it takes them to operate before they get licenses in Kenya. I tried to invest in iPay in 2010 so I am very familiar with this. So, let’s kill the narrative of Nigerian fintechs ‘breaking the laws.’ Those licenses are never easy to get,” Asemota wrote in the tweets.

In 2016, TechCabal reported that Flutterwave expanded to Kenya by partnering with Kenya’s KCB. The company’s first customer was YC-backed The Ticket Fairy. At the time, Kenya was the second country—after Ghana—into which the Nigerian unicorn expanded. 

TechCabal has reached out to Chipper Cash for comment but the company did not respond to our request.