Ham Serunjogi: How Chipper Cash is Surviving the Slowdown

I think the companies that are able to be long-term minded as much as possible have a competitive advantage. And that's always been... Our focus was really access, right? For us, price and cost is a barrier in our space. The more expensive it is, the less people that can use it. And Chipper was the intent for our business to have as many people participate in formal financial services as possible, so removing that barrier. And by the way, Chipper is still fee-free for local domestic payments in a country we're available in. People don't pay fees for sending payments to Chipper to Chipper in your local countries. That's still true. And I think at the heart of our focus on access is how to provide the best quality services with the lowest barriers to participation. The times then were more favorable for doing capital-intensive things, raising a lot of capital and being aggressive in different areas. Times now are more aligned with capital efficiency.

Being as thoughtful about resources as we can, and still doing that with a long-term mindset. I keep telling everyone in the team and my leadership team that we still have to think about Chipper in 10 years, not just in 10 weeks or whatever time frame. People who are doing things with short-term viewpoints think about things. Any company, particularly the leadership team, is uniquely the only team that thinks about things in terms of now but also in the long term. Otherwise, what are you doing if it's just for a quarter or a month? So our north star hasn't changed. Our ambition for the business doesn't change. Our impact on what I think we can be hasn't changed. But obviously, to better navigate these times, which are probably the most challenging stretch of time.

Africa has always had its challenges in terms of operating it. There's always been that very well-known haircut that you get from being an African company, right? It's the additional risk. You get questions: people asking you, 'What about civil wars? What about this? What about that?' And you're like, 'Okay.' And so that's always been there. It didn't start two years ago, so we've always had to deal with those things. I think in many ways, the bar has only been... Around the African fintech space and African tech space in general in the last year or two years, I think there was a time when every other week there was a company in Africa raising money. That wasn't, you know, Paystack or Flutterwave or Chipper. That wasn't the case in 2018. You remember this. When we started Chipper, Ma and I, the only companies we'd heard about raising money at the time were Flutterwave. Literally, even Paystack hadn't raised money yet. It was just such an unknown thing to tell someone that there's this thing that you can do in Africa that is not M-Pesa but is still financial services. So we've come such a long way. And even if it feels like this last year and a half has been very, very hard, I think it's still net net a much better place than... It's only probably become more prevalent. But that's part of what we're building to solve for, right? Those are the challenges that we're looking at as opportunities to fix.

We try to optimize more for what do we know ourselves, what are we seeing in the marketplace, what are we learning from our users, and what are we trying to get rate accordingly with. There's a tremendous amount of value to be created and built in businesses in Africa, especially in our space. We're moving money for millions of people. Businesses rely on us. People rely on us to make purchases for things that they couldn't have done otherwise via our cards, via stocks to give people a chance to invest and save, and access other assets. Those things are very, very hard to do. We know because we've done them. It's such a difficult product to put out there. So therein lies a tremendous amount of value to be created if you can do it. Now, there are those people who have a comment about something. I think vis-à-vis user acquisition in Africa, I mean, African consumers I think are just as exciting a consumer to serve as any other market in the world. There's a tremendous amount of intent and ability to interact with online goods and the global economy. And if you create a medium for people to do it, you'll create a tremendous amount of value. So I don't think any particular way about African consumers being less valuable to invest in aggressively vis-à-vis user acquisition. I think it's about doing it in how it makes sense for your business and being smart about it. Definitely when capital was cheaper, you can be very aggressive with user acquisition, with market entry. Those things are very expensive: getting into a market, getting a license, setting up a team, integrating with banks and... Finances that is not as costly as it could be at another time, but I still think there's a relevant amount of value to be seen and to be acquired from supporting and serving African consumers. Yeah, and investing in that, we will never stop doing.

Let me first go back a little. We just acquired a company in southern Africa called Zuna to double down on that. In some ways, supporting that breadth of products across multiple markets in Africa, you're forced to be both horizontal and vertical at the same time. What I mean by that is you have to build your product and you have to build the services that support your product. In more mature markets, you can go and get rails to do payments, you can go get rails to do compliance, you can get rails to do shipping and all these things that are very heavy lift efforts, but they exist. In more mature markets where they don't exist, you have to build them out yourself. Chipper ID is in very many ways a function of us having just continuously improved and built out our compliance functions. We've had to be very... All require a bunch of screening, matching different watch lists, so much stuff that goes on. And the more efficient you can be with those things, the better the product is, but also the cheaper it is for you as a company. It's less cost. Definitely in the last 18 months, as we've become even more maniacally focused on costs in our own business, we've looked at areas we can be even more efficient. And one of the things that we found that we're incredibly good at was building tools that we need for our business and not having to spend a ton of money on third-party services. So compliance being a very big area, we just got continuously better and better at doing our own stuff. And eventually we were like, we have a great suite that we know other companies are going to want to use and benefit from. And we packaged that up to create Chipper ID.

This is just a very unique way that we take our scale, breadth, and sophistication and offer it to other people. And we turn what is a cost center into a profit center. Those are things you can do when you're at a certain scale, certain ability to build good products. And small things — I'll give an example. If you try to do a verification of a user in Uganda, they sign up and you say 'put in your phone number, get an OTP.' The OTP doesn't get delivered. There's less than 50% deliverability rates for OTPs. So off the bat, half your customers are being blocked at that point. So we had to build a service, which we patented and are going to patent for, which uses USSD to send OTPs. And that took drop-off from like 50% to like the high 90s. These are things that you don't... Camera with poor lighting, you know, some of the words can't be read very well. What do you do with that? You have to figure out a way to verify those details. So there are very unique challenges that if you just go and get an Onfido or someone else, they don't understand, to no fault of theirs because they haven't really had to deal with this market in depth. But we have to solve those things at every point. And the end result is that we have a very uniquely built suite of products that works so well for our market and saves a ton of money.

Pioneers and innovators in every sense of the word, but they struggle with the logistical aspect of their business because we don't really have very good shipping. If I'm trying to ship a laptop to a friend in Uganda, that's such a painful thing to do. You can have the most amazing tech, but if you don't have those foundational infrastructure layers, either you build them yourself or your business is limited. And we've just had to build a ton of stuff ourselves. So I can't emphasize that piece enough, because from the perspective like Chipper ID as an example, we are so uniquely placed to want to have the most minimal aspect of the product. So if all we did was Chipper ID, we'd be looking to how do we add more products so we can...

That's a very good question, because it's something major that I think about all the time. Actually, I think there's more things that we say no to than we say yes to. Even between the two of us, when we're setting, do we want to tackle this right now? We've had to say no to more things. There's so many things I wanted to do that we haven't done yet. The exciting thing about Africa is that it's still such a virgin space that you want to do so much. But that also can be a problem if you try to do too much. And I don't think there's any magic answer in terms of 'do only four things, do three things, or do one.' That's something that you kind of constantly have to keep balancing. As a business, we've tried to be thoughtful at every turn around how we are adding products and services. We're not adding necessarily new products right now. Our sort of production phase was maybe 2020 to 2021, 2022. We built out a bunch of things in that period of time. But everything we added had a common theme to it. Those are things that all made the existing products better on the platform. But if you look at the Chipper app today, you can send money to anyone in your country and abroad, you can receive money, you can pay a business using API for businesses. So it's really created an ecosystem where every product that we've added actually adds more value to the ones that already exist. So we've tried to be methodical about what we're adding, not just adding random things, but things that we know our users want and that also enrich the existing products that we have on the platform. And I think that's allowed us to be a uniquely well-placed platform where you can do a bunch of things in the ecosystem and have them be done very well and have a great experience doing them.

Zuna was actually one of the first true pioneers of fintech in Africa. They've done a tremendous amount of work for organizations. So essentially, what we try to double down on with the Zuna acquisition is what we call now Chipper for Business. Today, I talked about having to be both vertical and horizontal. One of the things we've had to be very good at is building connections to telcos and banks to power cash-in, cash-out in different markets. And essentially, we've now set to leverage that infrastructure and offer it to businesses. So we have a bunch of organizations now that use our Chipper for Business suite to do collections and disbursements using those integrations. So acquiring Zuna was doubling down on that and taking that to the next level: getting a bunch of agent networks — they have a network of over 400 agents in southern Africa. The CEO and founder of the company, Brett, joined us and is now our Chief Product Officer, and we're scaling that aggressively to a bunch of other markets as well. So that's really targeted to us leveraging that aspect of our infrastructure to serve businesses, and also sort of take what was a very big investment to support the consumer business and have it be leveraged to drive a ton of value.

Physical shops you can walk into and buy something. I think in some cases, there's a very exciting digital aspect of what we do with fintech in Africa. And we don't touch any physical dollars. Our consumers live entirely in a digital space. All their money moves from a bank to a mobile money account, and so that allows us to exist entirely in the digital realm. But as you keep scaling and as you keep getting bigger and bigger, essentially you need to at some point have some interaction with the analog world. And in some markets, actually some markets, it's required by the regulator. Like in Zimbabwe, we have a license, and one of the requirements is having the ability for people to actually physically deposit money to your system. So there's some parts where it's actually a requirement from the regulator. It's an agency banking, and I think ultimately that's inevitable to start to participate in as you scale in southern markets and areas. For us, it's going to show up more in southern Africa for now. Very likely that we might have some form of that in other parts of Africa, but I think there's still a tremendous amount of work to be done in just supporting the movement of money between banks, Chipper, telcos, that sort of thing, before you get into the logistical nightmare of moving physical cash and handling that whole process.

I definitely feel like I've grown in the last 12 months a lot. If I didn't, that'd be terrible, that'd be concerning given how many new experiences I've personally had as CEO and someone who had to navigate the company through this period. It's absolutely been a very challenging period across the globe, but also for us in terms of how do we move from a model where we are very aggressive expansion to essentially... There's no how-to manual. There's no class that teaches you how to have a discussion with someone about laying them off, or how much to lay off, right? That's another learning point. In hindsight, I could have laid off more people in the first process, but you do so from the perspective of you want to have minimal impact on people, which is very important to me. You want to think about things more optimistically versus maybe less optimistically. If the market keeps getting worse and worse and worse, what's the worst case scenario? Are you hedging for that well? There's always room in every decision for a more downside assessment. And I think the first round of layoffs that we did, I definitely could have pushed harder to lay off more people. That was one of the learning points.

Other people, right, and concern about their job security, because we've had some scenarios where people say, 'My sister or my spouse has lost their job, my parent lost their job.' So they already come from a place where in the inner circle, whether it's at home or elsewhere, there's really fear around job security. And they want to come to Chipper and come to work and be comfortable and not be insecure about their job. So you have to provide that level of security and support. How do you manage those things in a world where you're doing your own layoffs? How do you communicate that well? Which teams do you need to pull back on more? Which teams do you need to double down on more? Those are all things that no one teaches you that you have to sort of make that decision. And sometimes you might make a suboptimal decision, but just making a decision is progress in its own right. So it's a bunch of things. Also, navigating macroeconomic climates: how do you plan accordingly? When do you plan to do another round of capital intake? Do you do it now? Do you wait 6 months? Do you wait 12 months? Who do you do it with? How do you manage that group of stakeholders which are your investors? How do you manage regulators as well? We have over 50 licenses, we deal with a bunch of regulators across the board. You also have to manage relationships whether you're doing layoffs, when you're thinking about how aggressive you want to expand to their markets or not. So there are so many things that all have very difficult questions that have no clear answer that you have to think about. And the end result of that is either you're more knowledgeable or you... Really cement your position and your lead in the space. For us, I think it's also given us a chance to have a renewed clarity on some things. For example, one of the silver linings of doing the layoffs was we actually became a lot more efficient as a company. Coming from growing incredibly fast — when I saw you in 2021, maybe late 2020, somewhere 2021, I think we maybe added another like 250 people between then and just a few months ago. So the very fast growth, those things create strains in the organization: communication, red tape, a bunch of stuff that builds up. So layoffs give you a chance to sort of re-right-size, get more... Things present themselves in times like those, and if you sort of lean in on those, you can actually come out of it much stronger and much more capable. So we feel pretty good about that. It was a tough decision to make, and it's not fun. Every CEO I've spoken to that's done layoffs will tell you how it's agonizing to tell people that you like and that you know that, 'Hey, we're going to have to let you go.' But coming out of that, you create a much stronger organization, you put yourself in a much better place to execute better. So I think overall, it's proven to work out well for us.

We have people approaching us to discuss investments or potential partnerships, so that's always a constant engagement. The discussion or the decision always comes around: who is the right partner, when is the right time, and what do you need? For us, what we've just said, focus on the last 18 months is putting ourselves in a place where we don't need anyone capital-wise, right? And that's being profitable. And that's been a singular goal: to just get ourselves to a place where we're profitable as a business and we're 100% self-reliant. We're in the strongest financial position I've ever been in as a business today. And we're very close to achieving our goal of being profitable. In a market like this, when times are very hard from a... Think more deeply around what are the optimizations in our own company that we can make. That's versus things like Chipper ID right. When we thought about where are the areas we're spending heavily, where we really incurring massive costs, third-party vendors is one of the big ones. How we think about different services that we rely on, how we think about user acquisition, how we think about marketing, how we think about all these aspects that make the whole thing run. And at every single point, there's always room for improvement. So I think the net result of it has been that we've become significantly better at being much more efficient as a business. And ironically, every time we've done a fundraising process, it's been when we least wanted to. So ultimately, the state of least fundraise is... The products that we build is just being a business that's around forever. So getting to a state of full sustainability and reliance, that's a very powerful place to be. So that's been a singular focus for us as a business.

I think that was leaked. I don't know how it was leaked, but someone involved in the process leaked it. But again, that's another area where I can say that there's always ongoing discussions with people who approach us about acquisitions. That's been true even when I met you in New York. There were people attempting acquisitions. It's been true ever since then. And we've never sought to put ourselves up for sale, so that's always... I'm a fan of WorldRemit. I think it's a great business. There are actually many synergies between us and them. We always engage different people to different degrees whenever we speak with them. Some try to move fast, put letters of intent across. Some don't, and we keep engaging them over other opportunities to partner. But that was one of those things. On the corporate side, there's always ongoing activity in terms of people that want to partner with Chipper, acquire Chipper. It's pretty obvious when you think about it, because a lot of the things that we've built are very hard to build. It takes a lot of time and money and brain damage to build a lot of the things for many smart people who work very hard every day. And if you're thinking about Africa and consumer fintech in Africa, a opportunity... These discussions are always happening. They are also very confidential. So I'm not just being ambiguous for the sake of being ambiguous. We actually have confidential engagements with these people. So I can't just come back and say, 'Oh, we discussed this and this and this and that.' And that's why when that leak happened, I was very upset. I said it was a bit shitty to be put in a place where I have to somehow discuss something that's confidential. And I don't like breaching things that I've agreed to be confidential about. But acquisitions are part of the game. If you speak to your favorite African fintech founder, they'll tell you that they get acquisition discussions all the time. So it's not unique to us in any way. I know for a fact many other folks are actively speaking with potential acquirers.

Unfortunately, we are raised to an unfair bar. It's like the first story of a bad thing happening, like, 'Oh, I told you. Look at that. I told you that's...' And you won't stop betting on this in this industry. It's so mature and so stable that you can afford that. Ours is still so young and still so new, and there's still so much stigma and stereotypical things about it that the first bad thing to happen feeds so strongly into that. Whenever I see stories of founders who do bad things or mislead people or they fraud, I'm like, 'God, those guys, do they know how much damage they're doing?' Do they know how far back they set the industry? Because that's a story that people who are pessimistic about our space will always hold up and point to. So I feel there's a responsibility for sure that we all collectively have. We have to put a level of expectation on a young space that there are going to be mistakes, but it shouldn't change the overall opportunity, and it should not be a reflection of everyone else that's trying to do which is the majority of people trying to do very good things and very good work.

That's one of the things I'm proudest of. All of our investors made their first investment in Africa with us, and I'm super proud about that. To be in Africa, you have to only be 100% based there, and I'm like, that doesn't make any sense. I think we want everyone to participate in our growth. The fact that Chipper has become—I'm proud of because we rely on Western funding and Western talent and Western other things to build a great product that serves millions of Africans. That is so cool. I think you need to take everything that you can take that is supporting you to build a great product that's going to make the continent much stronger and support people on the continent. I've talked to many founders who have come and said that their regret is that they focused too much on 'I have to be based in Lagos, I have to be based in this.' And then they realized that when it came to raising capital, they were limited. We started the company from the very beginning. We said, 'We want to be a global business focused on building products for people in Africa.' Ma and I were born and raised in Africa. You could take us to Mars; we will always be Africans. Our focus is building a product for people that are living in Africa, and we're going to take everything we can take in the world: talent, capital, advice from whatever corner of the world that gives it to us, and we're going to channel it to this very important cause. I think more companies need to think that way. And by the way, this is not just Chipper. Flutterwave is headquartered in San Francisco. They have even more Western investors than we do. MoneyPoint is in London. Coda is based in London. They are building products for Nigeria primarily. So I think it's a false dilemma to suggest that you have to be in Africa to build a great business. You should go wherever you need to go to get the resources to make it happen. Eventually, I think as the ecosystem matures, more capital will be available in Africa. But for now, if you're a young company trying to find capital, come out here and look for capital here. If you're looking for talent, look for talent wherever you think it makes sense for you. If you're looking for advice or whatever else, go wherever it makes sense. Optimize for whatever the best place to be is. Don't restrict yourself because of some weird thing that says 'I have to be in Africa because I'm in Africa.' So I'm proud of the fact that Chipper is structured the way it is.

Yeah, like I said, consumer fintech in Africa goes... I think Chipper is one of the biggest, if not the biggest, in many areas, and we're proud of that. But we have so much more work to do. We've only scratched the surface. We've got over 5 million users today on the platform. That's a peanut number. That's a joke. We're in a space where there's almost a billion mobile money active accounts. When you think from that perspective, we have so much more work to do. Our work is cut out for us. These next couple of years are going to be the years for us to continue to deepen our foundational infrastructure, licensing capabilities, all the layers that make the company work in a very strong way so that we can keep scaling going forward. What that means in the more... We're about to issue our millionth card, by the way, because it's grown really strongly. But we still struggle with things like Twitter doesn't allow prepaid cards, and we have to obsess over getting that accepted. There are still things that, when you look around, as soon as it's not acceptable, someone has to solve those things. These next couple of years are going to be about really ironing out those areas that I think still have Africa on the back foot because people think it's fraud and all these things. We have a really successful card program that has very little fraud compared to any other card program globally. It's a really wonderful program. But because it's based in Africa and it's an African program, people are like, 'Oh, that might be too scary for us.' Most places accept our card. You can stretch this out in many places. In Uganda, we are the first company in Uganda to be given a license to do stocks. That's a product that still requires a tremendous amount of educational investment. Going and telling a Ugandan that you can buy shares in Amazon and Tesla, but you could lose your money, it goes up and goes down—that's important. Most people think you buy a stock and it only goes up. So access is one thing, education is another thing. Until we can really move the needle in all those areas, that again requires tremendous amount of investment. Who's going to teach people about stocks? It's going to be us. Who's going to pay for that? You scale that times 10, 20, 40, 50 million people, you really have to... Going through a recession and an economic period of adversity has made every company much better. If you haven't come out of this period being more resourceful, something is wrong. Look within your company for what's wrong. Everyone who's come out of this with the right spirit has become more resourceful, more thoughtful. You're definitely a different type of operator than you were before, and that's a good thing. That makes you that much more capable for the next 10 years. That's as true for us as it is for any other company. So definitely, you're going to see us participate more in the B2B space. Chipper ID is the first of many efforts that underscores how much we've built to support our own growth that we can now offer others. There's more of that to come. And then obviously, we have a few more products from the consumer set that we also want to roll out that we've just had to pause on because the market conditions weren't right. But we're excited about the future.