Fintech Company, Chipper Cash Fires More Than 100 Workers and Scraps Crypto

One of the prominent Africa Fintech startups, Chipper Cash, has decided to fire more than 100 of its staff. We reported to you in December that the same company laid off around 12.5% of its employees. Erin Fasuro, the Vice President of the Engineering Department, decided last year to lay off 12.5%. The report has it that the decision has affected a third of its workforce, laying off more than one hundred staff out of the reported staff strength of 350.

Why is Chipper Cash laying off?

Reports from insiders at Chipper said the layoff is an ongoing effort targeted at raising funds at a significantly reduced valuation, of which shedding bloat emerged as an essential precondition among courted investors.

This continues a reorganization that began last year when Chipper reduced its employee count by 13 percent. From reports, 50 employees across Product, Marketing, and Compliance were laid off. Still, the most significant reductions were made to the Engineering department, which sources claim had needed to be more active before this and was perhaps appropriately downsized.

How many employees does Chipper Cash Have?

Every startup or company has several employees that work for them, and as said earlier, Chipper Cash has 350 members. This layoff decision has affected about one-third of the workforce, not forgetting they had the same conclusion last year in December.

Who was affected by the layoff?

A source said that the Chipper's engineering department managers and the teams are just too many, and it was a good decision to reduce the headcount. The layoff, the second in three months, is said to have affected staff across the engineering department (engineering leadership, engineers, technical program managers, analysts, and the IT staff).

The company, Chipper Cash, is also said to have halted its crypto department; the report has it that it has allowed most of the staff in that department to go due to the market slump. According to reports, some other affected areas were said to be the Business Management department, which is now handled by a single staff. The Vice President of Engineering at Chipper Cash said that the layoff decision affected many of her friends and close colleagues.

More on Chipper Cash

The Fintech Startup was established in the year, 2018. When it exceeded the $1 billion valuation threshold in May last year, Chipper, an African-focused startup, became the fastest to achieve unicorn status in the continent's technology sector. It quickly reached a valuation of USD 2 Billion after a wave of incredible growth and a raft of mega-rounds that attracted marquee investors like Jeff Bezos's fund Bezos Expeditions, SVB Capital, and Ribbit.

However, according to the latest reports, the now-bankrupt crypto firm FTX had led Chipper's USD 150 Million Series C extension round last year with a USD 40 Million investment. Then, it looked to add follow-on funding and had its valuation slashed by more than 37% earlier in 2022. Chipper would later secure enormous celebrity endorsement deals with superstars like Burna Boy and Patrice Evra.

According to the documents mentioned earlier, FTX offered Chipper an extra USD 35 Million in SAFE at a discounted valuation of USD 1.25 Billion last year. Although the African Fintech unicorn claims it is unaffected by the FTX contagion, there has been a big question as to whether the investments made it into Chipper's coffers and if Chipper had meaningful exposure to FTX following the collapse that has devastated several other companies.

According to insiders, Chipper has been looking for new investment for a significant portion of the previous year in reaction to the current IT market slowdown after scrounging up over USD 250 Million in finance two years ago.

Chipper Cash is aiming for further capital to strengthen its position and expand its penetration after increasing spending on marketing, hiring, and licenses over the previous year to reach 4 million users across six African nations and USD 169 Million in gross revenue. Most recently, it disclosed plans to expand strategically by purchasing struggling Zambian Fintech Zoona and obtaining a license in Malawi.

Final words

The significant headcount decrease at Chipper Cash is consistent with recent cost-cutting initiatives among tech industries, following the pattern of substantial layoffs that have wracked the sector locally and internationally over the past year. In recent months, Africa's expanding tech landscape has seen its fair share, with notable e-commerce Jumia recently letting off more than 900 employees, among others.

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