African fintech startup Chipper Cash has reportedly executed a third round of layoffs in under one year, which has affected the company’s COO.
A report revealed that the Vice President of Marketing Alicia Levin, the global chief operating officer (COO), and Leon Kiptum, the country director for Kenya, were part of those affected by the recent round of layoff which was executed last week. Also, several product managers were affected.
The company executed the third round of layoffs as part of its previously announced restructuring plan, to focus on core products and markets. It however did not disclose the total number of employees that were affected in its recent layoff round.
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In February 2023, it would be recalled that Chipper Cash laid off 12.5 percent of its workforce, which was more than 50 employees as the engineering team took the biggest hit with around 60% of those laid off coming from the department.
Also, the company saw its valuation slashed from $2 billion to $1.25 billion before FTX bankruptcy. In March 2023, insiders disclosed that Chipper Cash had been exploring potential options before the collapse of SVB.
In a statement regarding the probable impact of SVB’s collapse, the company wrote, “While this is a very worrying time for so many tech firms, the impact of SVB’s collapse on Chipper is insignificant”. The firm has further insisted that the bank’s failure will not impact global customer operations. Besides, in addition to the numerous banking relationships it has in the US, Chipper Cash is confident in the investors that remain supportive of its long-term vision”.
The company allegedly received multiple merger and acquisition proposals from various parties, which were evaluated to different extents. However, no final decisions were made, as the company chose not to pursue any options.
Meanwhile, Chipper Cash clarified that it had never intended to be acquired, as receiving such proposals was a common practice for them. The startup is one of the top unicorns in Africa with over 5 million customers and $1.5 billion in total process volume per quarter. However, amid the reported growth, the company has experienced a couple of challenges.
As regards the global fintech space, Economic headwinds have hit the sector hard, as companies have had to lay off employees and prune their valuations. PayPal was one of the largest companies to announce layoffs, which saw about 2,000 full-time employees affected.
As a result of macroeconomic factors, several startups plan to take a more cautious approach to spending and investments. As the funding winter aggravates, fintech firms, which are famous for hiring in droves and now laying off in droves too.
Layoffs have become the norm as rising interest rates and an extended bull run that swept across private and public markets over the last couple of years, among other factors, combine to make life difficult for tech companies.
Notably, amidst recession fears, investors are being stringent with their money, mainly toward growth and late-stage startups. As a result, startups have had to cut costs and trim down workforces to survive, those who have had some success raising capital have had to adjust to pre-pandemic valuations.