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African fintech Chipper Cash had USD 1 million in collapsed Silicon Valley Bank, says CEO

The tech world is still coming to terms with the collapse of its eminent lender, Silicon Valley Bank, popularly known as SVB, in the week ended.

In case you are not into these kinds of things, here’s a quick recap:

  • The upbeat mood around tech companies and startups during the pandemic period had seen the Santa Clara, California-based bank rake in record-high deposits from its customers who are mostly players in the tech industry, investors and companies alike. Subsequently, in order to make something for itself, SVB executives had approved the investment of the cash in long-term securities.
  • With the US Federal Reserve (“the Fed”) raising interest rates to counter rising inflation which has seen many tech companies around the world downsize in order to maintain profitability in coming months, deposits from the said SVB customers from the tech industry all but dried up, leaving it with shaky liquidity as far as cash-at-hand went. In effect, this meant that the bank would struggle to honour requests by its customers to access their funds, which it had stashed away in long-term bonds with the Fed.
  • So, now, what to do? SVB made the difficult decision to sell of these securities, incurring a huge loss in the process that meant that it needed to raise money from elsewhere to plug the deficit. It planned to do so by selling some of its shares. An announcement of the selling of its held bonds and plans to raise money was met with skepticism by the market: investors and customers alike.
  • In the wake a crashing stock market because of weak investor confidence, those plans to have its shares floated to new investors hit a dead wall. Unrelenting customers who had been watching everything unfold showed up in their numbers to withdraw and transfer their money to other banks and whatnot. A bank run ensued and the bank was immediately placed under receivership by the authorities in California.

Now that you are all caught up, what has all this got to do with Chipper Cash?

Well, the African fintech, which maintains a controversial presence (it once had operations) in the country by way of staff, was also a client of Silicon Valley Bank, as we have come to know thanks to the company’s CEO, Ham Serunjogi.

“…SVB was one of our many investors, and led our Series C round in 2021. This is a fact I am very proud of. SVB has been the most important banking partner to the entire Silicon Valley ecosystem; and for us at Chipper they have been incredible partners as investors. A little known fact is that 5 years ago when I was trying to open Chipper’s first bank account, SVB was the only bank that would accept us,” Serunjogi writes in a post on Chipper’s blog.

However, he is quick to allay the fears of everyone that SVB’s collapse will have a huge bearing on the company’s operations.

“…fortunately Chipper Cash has had overall insignificant exposure to both these events,” he says, referring to the collapse of SVB and another institution, Silvergate Bank, a crypto-centred financial institution.

Chipper Cash has interest in crypto as well.

“Given the scale and complexity of our global operations, Chipper Cash maintains multiple banking relationships across the world – including multiple within the United States. As such, we had a very limited amount of money (only about $1M) held in our SVB account at the time the bank was taken over by the California regulator. We have already received confirmation from the FDIC that we can expect about half the funds back by Monday March 13th 2023. Furthermore, there was absolutely no impact on our customer operations around the world.”

Chipper Cash has recently conducted two rounds of staff layoffs, as part of the widespread response by tech companies to the so-called “tech winter”, the industry’s reaction to the wider economic slowdown being witnessed across the world.



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