How Two Africans Overcame Bias To Build A Startup Worth Billions - Fintech HEAD TOPICS

How Two Africans Overcame Bias To Build A Startup Worth Billions

10/21/2022 3:00:00 PM

How Two Africans Overcame Bias To Build A Startup Worth Billions

Two Africans Overcame Bias To Build A Startup Worth Billions Fintech

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Forbes

How Two Africans Overcame Bias To Build A Startup Worth Billions A pair of twentysomethings from Uganda and Ghana thought there was a fortune to be made bringing transnational financial services to Africa ’s 1.2 billion people. With 5 million users, San Francisco-based Chipper Cash is just getting started. Then came a question from one of the partners: “Why don’t you go look for donations and grants to fund this?” Because, Serunjogi replied, this will be aFollow the Money: Chipper president Maijid Moujaled and CEO Ham Serunjogi in their San Francisco headquarters, where they located for access to venture capital. Sheel Mohnot, a former partner at 500 Startups—Chipper Cash’s first backer—chalks up some early investor resistance to ignorance about Africa. “No one was investing in Africa at the time,” he says. That has changed. Per CB Insights, venture capitalists invested $1.5 billion in African fintech companies last year, up sevenfold from 2020. Sub-Saharan Africans today have 605 million registered mobile money accounts—with which they can send cash via text message—up from 469 million in 2018. That makes the area fertile ground for more advanced consumer financial apps. Read more:
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Silver Peak has gained newfound attention in recent years as the energy and transportation sectors race to wean themselves off climate-warming fossil fuels. Read more >> Uganda introduces its first Ebola lockdown while it waits for vaccinesOfficials in Uganda have introduced a 21-day lockdown in the Mubende and Kassanda districts in a bid to tackle the ongoing outbreak A Cutting-Edge Music Festival in Uganda Keeps the BeatFor one weekend in September, a pine forest near Itanda Falls in Uganda was alive with dancers. They sweated throughout the night to electronic music, before drifting down in the soft dawn light to bathe in the river. WHO: Ugandan Ebola outbreak 'rapidly evolving' after 1 monthKAMPALA, Uganda (AP) — Uganda 's Ebola outbreak is “rapidly evolving” a month after the disease was reported in the East Africa n country, a top World Health Organization official said Thursday, describing a difficult situation for health workers. MisterCommodity China, WHO and the rest of the world should learn from Africa how to contain outbreaks and not let them spread worldwide. Need to put down trips from uganda Multicoin-Backed Sports Startup Pitches NFTs as Ticket to Fan ExperiencesMulticoin-backed crypto startup Mercury has raised $7.5 million from investors betting that its invisible crypto-tech will enable a lucrative wave of experiences for sports fans. realDannyNelson reports realDannyNelson XRP 🚀🚀🚀 BMW will spend $1.7 billion to build EVs in the US EngadgetBMW will spend $1.7 billion to build more EVs in the US. American Airlines posts record revenues in Q3 as travelers return to the skiesThe Fort Worth-based airline says it posted $13.5 billion in revenue in Q3, despite flying nearly 10% less than the same time in 2019. Give some back to the taxpayers for bailing them out? That's because it costs at least $500 to fly anywhere on their planes now! Well yeah of course they’re making billions. Charging $400+ to Denver that used to be $150 at most I t was the summer of 2018 , and Ham Serunjogi, a 24-year-old Ugandan immigrant, thought the pitch he was making to a Palo Alto venture capi­tal firm was going well.Red Cross workers place a coffin, containing someone who died of Ebola, into a grave on 11 October in Mubende, Uganda Luke Dray/Getty Images For the first time, officials in Uganda have introduced a 21-day lockdown in two of the country’s districts in a bid to stem rising Ebola cases.DJ Diaki , as well as championing contemporary electronic productions from Nigeria and South Africa.Worker who quietly lowered town's fluoride for years resigns Ebola “numbers that we are seeing do pose a risk for spread within the country and its neighbors,” Dr. He had explained how his fintech startup, Chipper Cash, would enable African consumers to send money to each other, across national borders, more cheaply and easily than the antiquated banking system—a sort of Venmo for the continent. Then came a question from one of the partners: “Why don’t you go look for donations and grants to fund this?” Because, Serunjogi replied, this will be a profit-making business. Only goods lorries will be allowed in and out of the districts over the three weeks. The clueless partner persisted: “Why don’t you talk to Unicef or an impact investing firm?” Serunjogi discreetly declines to name the firm, or to say which VC later told him that “regardless of what the metrics are, I have to apply a discount to this business because it’s in Africa. Image The first Nyege Nyege festival was in 2015.” Follow the Money: Chipper president Maijid Moujaled and CEO Ham Serunjogi in their San Francisco headquarters, where they located for access to venture capital. According to Emmanuel Mutoo at the it is unclear why a lockdown has been introduced when previous Ebola outbreaks in Uganda had a higher number of cases. Ethan Pines for Forbes Those memories still sting, even though Chipper Cash has now raised $300 million from a roster of blue-chip VCs, most recently in November at a $2. Ugandan officials have documented more than 1,800 Ebola contacts, 747 of whom have completed 21 days of monitoring for possible signs of the disease that manifests as a viral hemorrhagic fever, Ogwell said. 2 billion valuation. Although the ministry doesn’t specify which districts these cases and deaths arose in, a World Health Organization (WHO) report details 58 confirmed cases throughout Uganda as of 14 October, of which 50 were in Mubende and three in Kassanda.. “These were things I’d have to take with a straight face. But it was outrageous, and it still is,” Serunjogi says from the San Francisco office where he, cofounder Maijid Moujaled and nearly a fifth of the company’s 350 employees are based. Amid the ongoing outbreak, the first Ebola death was confirmed on 19 September – a . The two founders each have an estimated 10% stake in Chipper, translating into paper fortunes north of $200 million. Credit. Sheel Mohnot, a former partner at 500 Startups—Chipper Cash’s first backer—chalks up some early investor resistance to ignorance about Africa. On 12 October, Uganda’s health minister,. Uganda has had multiple Ebola outbreaks, including one in 2000 that killed more than 200 people. “No one was investing in Africa at the time,” he says. That has changed. Sophie Garcia Image In 2014, Debru and Nyege Nyege’s other co-founder, Arlen Dilsizian, pictured, started organizing club nights in Kampala. Per CB Insights, venture capitalists invested $1.5 billion in African fintech companies last year, up sevenfold from 2020. Sub-Saharan Africans today have 605 million registered mobile money accounts—with which they can send cash via text message—up from 469 million in 2018.. That makes the area fertile ground for more advanced consumer financial apps. Four years after its founding, Chipper Cash has 5 million registered users in seven countries, including Uganda, Ghana and Nigeria. It offers not only low-cost money transfers but bill payment, crypto trading and the ability to buy U. “Our goal is definitely to create meaningful income,” he said.S. stocks. Excluding crypto transactions, it booked more than $75 million in revenue in 2021, compared with $18 million in 2020. Others have netted sponsorship deals with brands like Meta, Burberry, Telfar and Off White. The idea for Chipper Cash was seeded when high-school-age Serunjogi saw the problems his father encountered trying to move money through Africa’s ossified banking system. Serunjogi’s family lived in Gayaza, a Ugandan town 10 miles outside Kampala, the capital. His parents owned a farm, and his father also ran an IT operation helping local businesses set up networks. As two white European men helming an organization that largely promotes Black African artists, Dilsizian and Debru said they think critically about Nyege Nyege’s hierarchy, and are wary of adding to the continent’s colonial history of exploitation. Though hardly rich, the family sent Serunjogi and his two brothers to a private high school and enrolled them in a competitive swim club. In 2010, Serunjogi, then 16, made the Ugandan Youth Olympic team. After having problems completing a bank transfer, his father was forced to fly to South Africa with an envelope full of cash to pay his son’s swim coach while they were training there.” The Ugandan multidisciplinary artist Darlyne Komukama has worked on Nyege Nyege’s communications and production since the collective’s founding. After high school, Serunjogi followed his older brother to Grinnell, a small liberal arts college in Iowa known for its strong academics, where both swam varsity. At Grinnell he met Moujaled, a Ghanaian computer science major who had started a popular student coding group. Almost immediately, the two began talking about developing an African money transfer app. “The Western world only heard about us because of them and their white privilege. But first they wanted real-world tech experience and needed work visas. So during his junior year Serunjogi sent cold emails to Mark Zuckerberg and Sheryl Sandberg and snagged an internship with Facebook, which turned into a full-time job in Dublin after he graduated in 2016. In the spring of 2018, Serunjogi texted Moujaled, who was working as a software engineer in San Francisco, to say it was time to get going.” Dilsizian said he and Debru haven’t made much money from Nyege Nyege. Serunjogi quit his job and moved into Moujaled’s studio apartment, sleeping on an air mattress in the kitchenette. The two used their combined savings of less than $30,000 and Moujaled’s ongoing salary as seed capital. They launched a test version of their app in July 2018, letting customers send money from Uganda to Ghana for free. They took pitches to more than 50 VC firms until, in November 2018, 500 Startups agreed to invest $150,000. Before the papers were signed, Mohnot wired $40,000 to Chipper after Serunjogi told him he was about to miss rent. “I will be eternally grateful to him for that,” Serunjogi says. Chipper’s free, easy-to-use app was a big improvement over the available alternatives. For example, Kenya’s M-Pesa, which launched in 2007, charges 1% to 2% for many domestic transfers. By mid-2019 Chipper Cash was available in Uganda, Ghana, Kenya and Rwanda. It soon expanded to Nigeria, Africa’s biggest market with more than 200 million people, and by the end of the year, it had 600,000 customers. It also introduced a foreign-exchange markup fee of 2% to 5% to start generating revenue. As bitcoin rose from $14,000 to $20,000 in the fall of 2020, Chipper began to let users buy and sell bitcoin and ether, establishing a second lucrative line of business: trading fees. It reached a $2.2 billion valuation in late 2021, with investment from firms including Sam Bankman-Fried’s FTX, Ribbit Capital and Bezos Expeditions. Transactions grew from $200 million in the first quarter of 2021 to $1.6 billion 12 months later. All that growth comes with added high-stakes challenges. One is liquidity: Chipper needs to make sure it has enough funds in each country to support instant transfers. When it doesn’t, transaction times can slow to a full day or longer. Money can solve that problem. A bigger worry is competition. Senegal-based startup Wave offers similar services (albeit in different countries so far) and notched a $1. 7 billion valuation last year. Other remittance companies such as Remitly and Wise don’t yet let people send money from one African country to another, but there’s nothing stopping them from entering the market. For now, Serunjogi is focused on maintaining Chipper’s steep growth, moving to profitability—and helping Africans while doing so. Customers benefit, he says, when they can move money easily and have new ways to invest and build wealth. “I’m a deep believer in the role of entrepreneurship and capitalism in improving the lives of people who live in developing countries. ” MORE FROM FORBES .