Ham Serunjogi: How Chipper Cash is Surviving the Slowdown

November 16, 2023

Today's guest is Ham Serunjogi, the Co-founder and CEO of Chipper Cash.

In 2021, Chipper raised $150 million Series C extension, valuing the startup at $2 billion, but has since cut its valuation, reportedly by 70 percent, has engaged in three rounds of layoffs, reducing its headcount by nearly 175 from its peak of 450, and has drastically pulled back from its aggressive growth and expansion strategies across the continent.

This conversation with Ham comes at an interesting time for Chipper and in the market, in general. Tough macro conditions on the continent, a slowdown of funding, tech layoffs. And at the same time, a lot of new and significant product launches for the company.  

00:00 - Intro
03:05 - Long-term perspectives & time horizons
06:13 - Challenges operating across Africa
08:20 - Reflecting on Chipper's growth strategies
11:25 - Chipper ID
15:40 - Full-stack vs. focus
19:40 - Zoona acquisition & agent networks
26:04 - What lessons has Ham learned?
30:15 - Layoffs
31:45 - Capital allocation going forward
34:24 - Zepz acquisition?
37:07 - More lessons
43:39 - What does the future look like for Chipper?

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Ham Serunjogi: I'm not shy to come out and say it's been a tough 18 months.

Justin Norman: That's Ham Serunjogi, the co-founder and CEO of Chipper Cash.

Ham Serunjogi: I mean, you have to come in knowing that it's actually really, really hard and painful, but the reward can be incredibly exciting.

Justin Norman: You have a quote that stood out to me talking about long-term perspectives and time horizons.

Ham Serunjogi: Obviously, the times then were more favorable for doing capital-intensive things. Times now are more aligned with capital efficiency.

Justin Norman: From a company-building perspective, I know there's a lot of lessons as well.

Ham Serunjogi: End result of that is either you're more knowledgeable or you just raise your hand and be like, "I can't do this. I'm out." Maijid and I like, we'll never do that.

Justin Norman: Today's guest is Ham Serunjogi, the Co-founder and CEO of Chipper Cash. This conversation with Ham comes at an interesting time for Chipper and in the market in general. Tough macro conditions on the continent, slow-down of funding, tech layoffs, and at the same time, a lot of new and significant product launches for the company. In 2021, Chipper raised $150 million Series C extension, valuing the startup at $2.2 billion, but has since cut its valuation reportedly by 70%, has engaged in three rounds of layoffs, reducing its headcount by nearly 175 from its peak of 450, and has drastically pulled back from its aggressive growth and expansion strategies across the continent.

Justin Norman: So in today's episode, Ham and I talk about all that and much more. This episode of The Flip is sponsored by Onafriq, formerly MFS Africa. Onafriq is the leading real-time payments network for Africa, which connects over 500 million mobile wallets across over 1,300 cross-border corridors and in over 40 countries across the African continent. Throughout the season, we'll hear from the Onafriq team about their work to create a borderless world. In this episode, we're joined by Martin Mbonu, Onafriq's Country Director for Sierra Leone and Director for MNOs in Anglophone West Africa, to talk about Onafriq's agent-led remittance product, BaxiRemit.

Martin Mbonu: Being the hub that aggregates mobile money across the continent, with acquisition of Baxi, Baxi has been leveraging on its synergies with the hub. If you observe the agent distribution in Nigerian user behavior with the agents, what typically happens is people live around these agents. The agents lives among them. The agent is in the market. The agents are on their street. So rather than going straight to an ATM or to a bank branch, they'll go to a Baxi agent either to withdraw cash or to deposit cash. And where does BaxiRemit come into that? It allows you send money from Nigeria to about 20 countries in Africa. An individual could go to a Baxi agent, give him cash or card, and the agent is able to do a transfer to any of the African countries, the 20 African countries that we've listed.

Martin Mbonu: A typical example that you would see are artisans who migrated from Togo into Lagos to work. Some of these guys are plumbers, some of them are bricklayers, and they send money back home every week. These are very little transactions at $70, $50. They go to an agent, give them either cash or the card, the account here is debited and the points is transferred. So the same behavior across product vertical. The only difference is that wouldn't add the cross-border feature today.

Justin Norman: So last we talked, we talked a lot about Chipper's, business model and and growth strategy. And you have a quote that stood out to me talking about long-term perspectives and time horizons and the short term. A lot of fintechs or companies in general are still focused on fees and Chipper at the time was talking about fee-free everything and fees are gonna go to zero and having to have long time, horizons for all of that. Obviously a lot has changed. A lot is sort of macro-related, Naira devaluation downturns. There has been some rounds of layoffs at Chipper as well. I'm curious to know how, if at all, your thinking has evolved as it relates to growth and sustainability and a lot of what we talked about a couple years ago.

Ham Serunjogi: 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 something that I think I strive to have with Chipper. And I think it's also true that there's always times when you have to navigate accordingly. And different times require different adjustments. I think at the heart of that statement I made 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 is 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 any country we're available in. People... We don't charge fees for sending payments to Chipper to Chipper in your local countries.

Ham Serunjogi: 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, capitalism-expensive, less money going around. So you need to adjust accordingly. And we've been exactly as compliant with that as any other company has in terms of looking at every cost area of the business, being efficient, making sure that we're being as thoughtful about resources as we can, and still doing that with a long-term mindset. I keep telling everyone on the team and my leadership team that we still have to think about Chipper in 10 years and not just in like 10 weeks or whatever timeframe people who are doing things in short-term viewpoints think about things.

Ham Serunjogi: So in any company, in particular, the leadership team is uniquely the only team that does think about things in terms of like 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 hasn't changed. Its impact on what I think we can be hasn't changed, but obviously to better navigate these times, which are, I think this has been probably the most challenging stretch of time in the financial markets for many businesses since I think 2008 or even before. So you have to adjust accordingly and you need to make the necessary adjustments to be well-positioned to go through that period and come out stronger. And I feel pretty good about the changes that we've made.

Justin Norman: Yeah. And that is not necessarily unique to African fintechs. I think fintechs in general, globally, we're here in the Bay Area right now, I think a lot of fintechs are experiencing markdowns. Do you feel that there's a particular challenge in operating in African markets that you felt, or how has that impacted Chipper in that way as well?

Ham Serunjogi: Africa has always had its challenges in terms of operating in it. There's always been that very well-known haircut that you get from being an African company. Right? It's like the additional risk, you get questions people ask you, "What about civil wars? What about this? What about that?" And you're like, "Okay." And so that's always been there. That 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 raised higher from what was really a difficult place for a lot of businesses doing work in Africa have had. But also, I think at the same time, I'm very optimistic naturally as a person and I think I've seen a tremendous amount of change and appreciation and excitement around the African fintech space and African tech space in general in the last year, two years.

Ham Serunjogi: I think there was a time when every other week there was a company in Africa raising money, and that wasn't Paystack or Flutterwave or Chipper. That wasn't the case in 2018. And you remember this. I mean, when we started Chipper, Maijid and I, the only companies we'd heard about raising money at the time were Flutterwave, literally. Even Paystack hadn't raised money yet. And 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 it's 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 a much better place than we were in 2016 or 2017.

Justin Norman: Yeah.

Ham Serunjogi: So overall, I'm super optimistic. There's unique challenges. We talked about the Naira devaluation. I think currency fluctuation has always been an issue in Africa. That's something that we've had to deal with from day one, I think 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.

Justin Norman: Yeah. So we've talked about long time horizons. You talked earlier about doing capital-intensive things when capital was cheap. One question though that I have as it relates to this growth and sustainability question is I think a lot of people have talked about, to do sort of hypergrowth to subsidize user acquisition in Africa is a risky proposition because of whatever the consumer spend capacity. Right? I'm curious to know in the context again of sustainability, if your perspective has shifted at all in that, or if it's only shifted as a function of, as you said earlier, capital being more expensive now.

Ham Serunjogi: Honestly, I don't spend much time thinking about what other people say, to be fair. Everyone has an opinion about something. I think everyone is an expert in African fintech, but few people actually doers of it. And I try to sort of 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 iterate accordingly with? There's a tremendous amount of value to be created and built in with businesses in Africa and 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. We give people a chance to invest and save and access other assets.

Ham Serunjogi: 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 tremendous amount of value to be created if you can do it. Now, there are those people who have a comment about hypergrowth or user acquisition or this and that, and that's where it's gonna be. That's sort of noise that you're trying to do something new, you have to be good with giving it its due sort of relevance, otherwise, we'll never do anything. There's always an opinion about something. I think vis-à-vis user acquisitions in Africa, I mean, African consumers 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.

Ham Serunjogi: 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. And definitely when capital was cheaper, you can be very aggressive with user acquisition with market entry. Those things are very expensive, right? Getting into a market, getting a license, setting up a team, integrating with banks and telcos, that's a high capital in terms of endeavor. Doing it across 10 markets is 10 times more expensive. Acquiring a bunch of those things are all expensive. So you definitely wanna do those things when you've planned to do them in a way that the capital that 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. And investing in that, we will never stop doing.

Justin Norman: Yeah. And from a capital allocation perspective, I mean the market expansion is an expensive and cumbersome thing, but I think you guys are also sort of expanding vertically as well. We're talking a couple of weeks after you guys just launched Chipper ID, which I believe has been in the works for quite a long time as well, back to this idea about doing capital-intensive things when the capital is cheap. But can you talk a little bit about that? I wanna maybe talk about...

Ham Serunjogi: Absolutely.

Justin Norman: Get into the weeds with product strategy a little bit afterwards. But maybe just tell me a little bit about the nexus of Chipper ID first.

Ham Serunjogi: Yeah. So let me first go back a little bit and talk about why launching products is very hard. Right? On our platform today we've got P2P, we've got cross-border payments, we've got cards, we've got stocks, we've got crypto, we've got business payments and we just acquired a company in Southern Africa called Zoona 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, then 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.

Ham Serunjogi: We've had to be very sophisticated with compliance, fraud reduction and elimination, risk management, just a bunch of... There's so much that goes on under the hood. When you send a payment, there's so many things happening before that payment is actually cleared in a millisecond that all require a bunch of screening, matching different watch lists, so much stuff that goes on. And the more efficient it 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. And 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.

Ham Serunjogi: So compliance being a very big area, we just got continuously better and better doing our own stuff. And eventually we're like... We have a great suite that we know other companies are gonna wanna use and benefit from, and repackage that up to create Chipper ID. So the 18 months definitely reflects the amount of time it took to get to that point, but we did it for ourselves first. And even if we never have another client use Chipper ID, what it saved us as a business, millions of dollars, is already worth it. But it's just not a very unique way that we take our scale and breadth and sophistication and offer it to other people and we turn what is the cost center into a profit center. And those are things you can do when you're at a selling scale.

Justin Norman: Yeah.

Ham Serunjogi: Selling scales and ability to build good products and small things. I'll give you an example, right? If you're trying to do 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, right? So off the bat, half your customers are being blocked off at that point. So we had to build a service which we patented and got a patent for, which is USSD to send OTPs. And that took drop-off point from 50% to the high 90s. But these are things that you don't think about twice in the US. You just go into Twilio, everyone gets their OTPs. In Uganda, that's 40% success rates, 30% success rates. So, how do you solve that?

Ham Serunjogi: IDs, right? You get a ID taken from a very low-quality camera with poor lighting, and it's... Some of the words can't be read very well. What do you do with that? So you have to figure out a way to verify those details. So there's very unique challenges that if you just go and get an Onfido or someone else, they don't understand to no fault of theirs 'cause 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.

Justin Norman: Yeah. And so I sort of have this idea that becoming a full-stack fintech is a strategy, but perhaps the right way to think about it is it's become a necessity because there's things broken across the entire value chain.

Ham Serunjogi: Yeah.

Justin Norman: So you have to build it, and then it can become a profit center for you guys thereafter.

Ham Serunjogi: It's painful, but it's so worth it when you come out on the other side of it. You have to do so many things for you to be able to scale and grow and scale efficiently. Look at like Jumia, a great business, pioneers and innovators in every sense of the word, but they struggle with the logistical aspect of their business 'cause 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, right? 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 ourself. So I can't emphasize that piece enough because from the perspective of like Chipper ID as an example, we are so uniquely placed to want to have the most minimal aspects of the product.

Ham Serunjogi: So if all we do was do Chipper ID, we'd be looking to, how do we add more products so we can charge people more money? But here, actually, our incentive is how do we remove stuff so we can cost us less money? And that puts you in a very unique place as a service provider, which I think makes us even that much more capable to compete in spaces that become available to us as we get bigger.

Justin Norman: Again, it might be a function of necessity, but I think there's a lot of sort of the punditry talking about the importance of focus, right? And especially in this sort of age of APIs and specialization enabling you to have sort of hyperfocus, I think that's not necessarily the case in, again, the African fintech context. How do you think about this idea about focus or about taking on too many things when you're trying to do everything well? Or again, is it just like a, what choice do we have?

Ham Serunjogi: Yeah. That's a very good question because it's something Maijid and I think about all the time, right? And actually, I think there's more things that we say no to than we say yes to. Even between the two of us, like when we're deciding, "Do we wanna 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. For example, microfinance, no one has really done that well. I mean, we have a bunch of different options, but I don't think that it's been solved properly. And I think we have ideas on how we can do that really well. There's so many areas around, I think fintech, what I think is exciting about fintech in Africa is that it's still such a virgin space that you wanna do so much, but that also can be a problem if you try to do too much.

Ham Serunjogi: And I don't think there's any magic answer in terms of like do only four things, do three things and 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 turnaround how we are adding products and services. We're not adding necessarily new products right now. Our sort of production phase was maybe 2020-2021, '22. We built out a bunch of things during 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 where you can send money to your country and abroad, you can receive money and then you can use the money to buy stocks in Amazon or Tesla or whatever in your local country.

Ham Serunjogi: You can buy crypto on the app. You can put that on your Visa card and spend it online to pay for your tuition or whatever. You can pay businesses. It got 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 really 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. I think that's allowed us to be a uniquely well-placed platform for, you can do a bunch of things in the ecosystem and have them be done very well and have a great experience doing them.

Justin Norman: Yeah. And you guys made a recent acquisition of Zoona in Southern Africa. Where does that fit into the equation and what's the vision for integrating that business into the Chipper platform?

Ham Serunjogi: Yeah. Zoona was actually one of the first true pioneers of fintech in Africa. They've been around for a very long time, very well-run business. They have all access you can think of to different databases and national switches and central bank access in Zambia. And they've done a tremendous amount of work for organizations. So essentially, what we're trying to double down on with the Zoona acquisition is what we call now Chipper for Business. Today we have... I talked about having to be both vertical and horizontal. One of the things we've had to be very, very good at is building connections to telcos and banks to power our 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.

Ham Serunjogi: So acquiring Zoona was doubling down on that and taking that to the next level, getting a bunch of agent networks. They have about a network of over 400 agents in Southern Africa. CEO and founder of the company, Brad, joined us, is now our chief product officer and leads that team. And we've been pushing ourselves to have a very competitive suite of business products. And so many organizations, Save the Children, a bunch of other organizations across Southern Africa use the Chipper for Business suite to do collections and disbursements 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.

Justin Norman: Yeah. You just talked about agent networks, right?

Ham Serunjogi: Yeah.

Justin Norman: And I think that's a really interesting consideration in the context of like the question of where African markets are today. Right? I think we've seen a lot of fast growth also in Nigeria with Moniepoint and OPay in Senegal and Côte d'Ivoire with Wave and they're sort of agent-led. To what extent do you think about that question of like being digital first versus meeting the customers where they are and Zoona having this agent network that you can then integrate and how this impact other markets that you're looking at as well?

Ham Serunjogi: I think it's a very interesting... It's sort of like... Amazon was like 100% online bookstore and now they have some physical shops you can walk in and buy something. And 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, or their money moves from a bank to money account. And so that allows us to exist entirely in the digital realm. But as we keep scaling and as we keep getting bigger and bigger, essentially, you need to, at some point, have some interaction with the analog world. And in some markets, some markets actually, it's required by the regulator. Like in Zimbabwe, we have a license in Zimbabwe, and one of the requirements is having the ability for people to actually physically deposit money to your system.

Ham Serunjogi: So there's some parts where it's actually a requirement from the regulator. But generally speaking, as you keep scaling, there's gonna be needs for you to interact with the consumer at a physical point somehow. And agent networks have been very effective ways that that happens in Africa. That's the heart of mobile money business as you know. It's agent banking. And I think ultimately that's inevitable to start to participate in as you scale in certain markets and areas. And I think for us, it's gonna 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.

Justin Norman: This season of The Flip is all about sharing lessons and insights from some of the most experienced and esteemed founders from across the African tech ecosystem and it's a mission for which we're proud to partner with Norrsken22 to share wisdom and insights from the fund's Unicorn Board as well. We know that advisors and mentorship are an important part of the venture funding process, and throughout this season we are speaking to and learning from the successful founders, operators and investors from Norrsken22's Unicorn Board. In today's episode, we spoke about market expansion with Henrik Ekelund, founder of the global consulting firm, BTS Group. Over a 30-plus year career, Henrik grew BTS from a small firm in Sweden to a publicly traded corporation operating in 34 countries with a client base across more than 50 countries.

Henrik Ekelund: I spent my business life building this company, BTS, from a one-person operation, starting basically in a garage in Sweden with 5,000 bucks to today, a global consulting company across the planet, publicly listed, rapidly growing. We were in one market, our home market, Sweden, and we wanted to become global. And how do you do that? Do you add a market first or do you add a service line first? We had one product and one market. Now we have many markets and we have nine service lines. But that has been a gradual expansion, one step at a time, faster later in our development. And there's two key lessons. Number one is to pick the right markets. Don't only look at market research. Go there, test, learn, combine analysis and direct market experience. The second is don't go for too many markets too fast. Focus. If you have a one-home market like we did, pick a first market outside of your own, succeed there and then move on to a third, fourth, and with time, you can accelerate. I think a lot of companies make two mistakes; one is to look too much at analysis, not going to the field enough, and the second mistake is you wanna conquer the world at once. And as I think many companies have learned recently, as well as Napoleon Bonaparte learned 200 years ago, if you go too wide too fast, you will fail.

Justin Norman: So we've talked a bit about some of the recent lessons, product and expansion strategy-specific. I think from a company-building perspective, I know there's a lot of lessons as well. You gave a great interview with Forbes just talking, I think, very transparently, which I certainly appreciated, about some of what's happened at Chipper as it related to the multiple rounds of layoffs and things like that. So you said, "I feel like I've grown up so much in the last 12 months." What sorts of things have you learned and what stands out to you?

Ham Serunjogi: Yeah, 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, [laughter] given how much, I think, how many new experiences. I've personally hired as CEO and someone who's 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 were very aggressive expansion to essentially focusing more on efficiency, sustainability, and still managing to still have some level of growth in terms of we still wanna get in new markets, we wanna get some new products out. You can't stop innovating, but you have to sort of balance that out depending on what your needs are. There's no how-to manual on... There's no class that teaches you how to have a discussion with someone about laying them off...

Justin Norman: Right.

Ham Serunjogi: Or how much to lay off. Right? That's another learning point, if I'm being candid. In hindsight, you could have laid off more people in the first process, but you do suffer from a perspective of you wanna have minimal impact on people, which is very important to me. You wanna 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? And there's always room in every decision for a more downside assessment. And I think the first trench of layoffs that we did, I definitely could have pushed harder to lay off more people. That was one of the learning points. The learning point was communication, right? How do you communicate to hundreds of people that you employ that, "We're gonna have to let some of you go"?

Ham Serunjogi: And how do you manage the sadness and the fear it creates in other people, and concern about their job security? 'Cause we've had so many 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 wanna 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 make those decisions with the information that you have and be decisive.

Ham Serunjogi: That's another thing that I also appreciated more and more in the last couple months. Being decisive is such a superpower. 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. And also obviously navigating macroeconomic climates, right? How do you plan accordingly? When do you plan to do another round of capital intake? Do you do it now? Do you wait six months? Do you wait 12 months? Who do you do it with? How do you manage to get 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. Those that put yourself have to manage relationships, whether you're doing layoffs or when you're thinking about how aggressive you wanna expand to their markets or not. And so those are... There's so many things that all have very difficult questions that have no clear answer that you have to think about.

Ham Serunjogi: And the end result of that is either you're more knowledgeable or you just raise your hand and be like, "I can't do this. I'm out." Maijid and I, we'll never give up. We're super bullish about what we're doing. We're super excited. I think the opportunity to do it has never been bigger than it is now. I think even in terms of most people are retreating and pulling back, this is the time to really cement your position and your lead in the space. And for us, I think it's also given us a chance to have a renewed clarity on some things. For example, part of I think... 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. Like when I saw you in 2021, maybe late 2020 somewhere, 2021?

Justin Norman: We'll never know. Yeah.

Ham Serunjogi: Yeah, somewhere there. I think we maybe added another 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 right size, get more efficient, get leaner in some areas. And we've actually been more productive and more executed better since we did our last layoff than we had in the last, I'll say, two years. So there are opportunities that 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, yeah, we feel pretty good about that it was a tough decision to make and it's not fun. And every CEO friend of mine I've spoken to that's done layoffs, they'll tell you how it's agonizing to tell people that you like and that you know that, "Hey, we're gonna have to let you go."

Justin Norman: Yeah.

Ham Serunjogi: But coming out of that, you create a much stronger organization. You put yourself in a much better place to execute better and all those things. So I think overall, it's proved to work out well for us.

Justin Norman: Yeah. So there's all these questions, how to think about layoffs, how to think about capitalization, right? So what are you thinking about now? And going forward, what does the sort of path to profitability, sustainability look like?

Ham Serunjogi: Yeah.

Justin Norman: Fundraising, right? That's I think a very interesting question in this context as well. How are you thinking about that?

Ham Serunjogi: Well, I always think about all those things. I'm constantly speaking with investors, constantly speaking with external partners. At every point in, since we started the company, there's been people approaching us to discuss investments or potential partnerships. So that's always like a constant engagement. The discussion or the decision always comes around, who is the right partner and when is the right time and what do you need? And I think for us, one of the things that we've just decided to focus on those last 18 months is putting ourselves in a place where we don't need anyone, capital-wise, 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.

Ham Serunjogi: And we've... This is the strongest financial position I've ever been in as a business today, and very close to achieving our goal of being profitable. In a market like this, when times are very hard from a perspective of... If your consumers are hurting, ultimately that'll translate to the business, but if you can find growth and drive value for your consumers, then you can find ways to keep generating value and generating revenue. So I think that's been one of those areas where it's forced us to think more deeply around, what are the optimizations in our own company that we can make?

Ham Serunjogi: And that's various things like Chipper ID, when we thought about where the areas we're spending heavily, like where we really incurring massive costs. Third-party vendors is one of the big ones. How we're thinking 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. And 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 want to. And so ultimately, the state of least wanting to fundraise, it's typically when you have the leverage to walk away from that process, so you just don't need the capital at all.

Ham Serunjogi: And I think long-term, and speaking of how access has always been a central part of the business, the most important way we can guarantee access for the products that we build is just being a business that's around forever. And so I think 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.

Justin Norman: Yeah. There was also some news or at least a rumor about a letter of intent from Zepz. So I don't know if there was anything there, but you talked about maybe opportunistically sussing. I don't know if there's anything...

Ham Serunjogi: I think that was leaked. I don't know how it was leaked, but someone involved in the process leaked it.

Justin Norman: It wasn't me.

Ham Serunjogi: No, no, it wasn't. But, again, that's another area where I can... What I can say is 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 was people at the time talking to us about acquisitions. It's been true ever since then. And we've never sought to put ourselves up for sale. So that's always been true. And we don't think that we're at a state where that's the best path for us. But that particular transaction is referring to with WorldRemit. They did approach us, we engaged them. I like Ismail, the founder of WorldRemit. I think it's a great business. There's actually many synergies between us and them. And 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 we have. Like on the cooperative side, there's always ongoing activity in terms of people that want to partner with Chipper, acquire Chipper. Pretty obvious when you think about it because a lot of the things that we've built are very hard to build.

Ham Serunjogi: It takes a lot of time and money and brain damage to build a lot of those things where many smart people who work very hard every day. And if you're thinking about Africa and consumer fintech in Africa, either your opportunity... Either your options are to compete with Chipper, or you acquire Chipper, or you partner with Chipper. So naturally, there's gonna be a lot of people who will say, "Hey, what are your thoughts? Can we work together on this? Can we work together on that? Are you open to an acquisition?" So those are always happening. They're 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 out and say, Oh, we discussed this and this and this and that and that's why when that leak happened, I was very upset. That's like, you know, it's 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 part of the game. If you speak to, pick 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 who are actively speaking to potential people about being acquired right now. It's just, it's a natural state of, of doing things. I'm very

Justin Norman: I'm very inclined to ask who, but I know you can't tell me.

Ham Serunjogi: Yeah. If I told you I'd be part of the problem.

Justin Norman: This series is a lot about what are some particularly pertinent lessons that founders have. And I think one recurring theme is, um, the role of, you know, transparently talking about how to address things like acquisitions or market downturns or devaluations or, um, fraud, even another one.

Ham Serunjogi: And privately I talk about this with a lot of founders.I engage, many people ask me for advice, I tell them do this, do that, so many people ask me things about offers they're getting or, you know, stuff like that, so I, I talk about this openly in private circles. Here I can honestly say that I think it's, the ecosystem is better. When people share more about these discussions. And even when things are hard. Like part of why I agreed to do this discussion is that I'm not shy to come out and say it's been a tough 18 months. We've had to navigate, you know, all these headwinds and these challenges. And we know that we signed up for that, right?

Ham Serunjogi: I hate to be someone who only projects things are great all the time. That is so fake and so untrue. And I think it attracts the wrong type of people into the space. I think you have to come in knowing that it's actually really, really hard and painful. And you're set up for that, but the reward can be incredibly exciting. And sometimes the reward is just a journey, even if you don't get to where you're ultimately thinking you want to go. So there's many lessons that I think I can definitely share about our experience, and I hope I share as many of them as I can in this conversation.

Justin Norman: Do you think at all about the sort of role that you or Chipper has to play in the ecosystem as well as it relates to its development? I think there's often this sort of idea about you have to be protective because we don't want to tell bad stories of the African tech ecosystem because it's hard enough to scare fundraisers away, right?

Ham Serunjogi: Yeah, unfortunately, you know, we're 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 Africa. So you have to be perfect all the time. A mature space like, you know, the tech industry in the US, you can have your, as many bad things happen.

Justin Norman: And a lot of bad things do happen.

Ham Serunjogi: And they do happen, yeah. And you won't stop betting on 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 are false, that... The first bad thing to happen feeds so strongly into that. You know, whenever I see stories of founders who do like bad things or they mislead people or they use fraud, I'm like, God, those guys, do you 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.

Ham Serunjogi: So I feel there's a responsibility, for sure, that I think we all collectively have, and I think the more prominent and the more visible you are and your brand is, even more responsibility to not, you know, do something that will adversely set the industry back. But I also think it's unfair evel of expectation to put 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.

Justin Norman: You're here in the Bay Area, right? You're well funded from US based VCs, and I'm curious to know of... In the context of what you just said, their perception and the extent to which, um, perception of us investors has changed or evolved over time and how it's evolved in the past five, six years versus now in this market downturn.

Ham Serunjogi: That's one of the things I'm proudest of, all of our investors we were the first investment they made in Africa. And I'm super proud about that because I think that's another person that has been brought in to the ecosystem and is more likely to fund other African businesses. And then the other thing is, I also think t there's this very weird notion that if you're doing an African fintech, you have to be in Africa.You have to 100 percent be based there. And I'm like, that doesn't make any sense. I think, it's like, we want everyone to participate in our growth. The fact that Chipper is something I'm proud of because we rely on Western funding and Western talent and Western, you know, other things to build a great product that serves, you know, millions of Africans. Like, that is so cool.

Ham Serunjogi: 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 out 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 time to try and expand to another place, they had built their entire organization on being in one place, or they were unable to interact with western VCs, or they didn't know how to acquire talent in other parts of the world, and we said, the company, from the very beginning, we said we want to be a global business focused on building products for people in Africa.

Ham Serunjogi: Maijid and I are born and raised in Africa. You could take us to Mars, we will always be Africans. Like, our focus is we're 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's willing to give it to us, and we're going to channel it to this very important cause. And I think more companies need to think that way.

Ham Serunjogi: And by the way, this is not just Chipper that does this. Flutterwave is headquartered in San Francisco. They have, I mean, even more Western investors than we do. Moniepoint is in London, Kudais based in London. And I think it's great because there's aspects that we still, I think, need to be better at as a whole continent to be able to be in a place where you can say that we demand that every single business in Africa has to be based here. I think eventually we'll get there. But I think for now, if you're a young company and you're 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 you're looking for, go wherever it makes sense for you. 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.

Justin Norman: And as a final question and closing point, it’s September 2023 now, we're sitting here, a lot has changed. What does the near term and long term future look like for Chipper? What are you building towards? And how has it changed or evolved since you guys started?

Ham Serunjogi: Like I said, actually nothing has changed about our long term plans and ambitions. We want to be th default financial platform for people living in Africa and beyond. And today, you know as far as 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. Those are peanut numbers, like that's that's a joke. We're in a space where there's almost a billion mobile money active accounts. When you think of it from that perspective, we have so much more work to do. Our work is cut out for us. And I think, these next couple of years are going to be the years for us to continue to deepen our foundational infrastructure, licensing capabilities, all of the layers that make the company work in a very strong way so that we can keep scaling going forward.

Ham Serunjogi: And I think what that means in the, like, more immediate time is that we still have more work to do. You look at a country like Nigeria, which is our biggest market, and you think about the opportunity that lies in just being able to have a card product that's accepted everywhere. Even today, our card product, 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 like, obsess over getting that accepted. There's still things that, you see, when you look around, are still not acceptable. Someone has to solve those things. These next couple of years is going to be like really ironing out those areas that I think still have Africa on the back foot because people think it's fraud and all those 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 is based in Africa and it's an African program, people are like, oh, you know, that might be too scary for us. Most places accept our cards, but there's still those things that, again, you don't think about when you're in the US. because the card walks everywhere. But an African consumer that wants small business and do an ad on Twitter, they can't do that in 2023.

Ham Serunjogi: You can stretch this out in many places. You know, 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, it only goes up, right? So, access is one thing, education is another thing. And until you can really move the needle in all those areas, that again, require a tremendous amount of investment. Who's going to teach people about stocks? It's going to be us, right? Who's going to pay for that? You scale that times, you know, 10, 20, 40, 50 million people. You really have to invest. And unless we do those things, we won't unlock that next level of opportunity, which I know is something that we can do.

Ham Serunjogi: So I just think as a company, obviously going through a recession and going through an economic period of adversity, I think has made every company much better. If you haven't come out of this period and you're more resourceful, something is really, like, look within your company for what's wrong. Everyone who's come out of this period has understood that this period has become more resourceful, more thoughtful. 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. And I think that's as true for us as it is for any other company. So definitely, I think you're going to see us participate more in the B2B space. Chipper ID is the first of many efforts that I think underscores how much we've built to support our own growth that we can now offer others, and there's more of that to come. And then obviously we have a few more products from the consumer side that we also want to roll out that we've decided to pause on because right now it makes more sense to just double down where we're active and where we're strong. And we'll tackle those other exciting areas as we go forward.