This past week has been one of the most chaotic and unraveling for the US technology and startup community. In the wake of both Silvergate Bank and Silicon Valley Bank (SVB) being shut down within a few days of each other, I wanted to come out and share a few thoughts. The most important of which is to clearly state that fortunately Chipper Cash has had overall insignificant exposure to both these events.
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.
I also wanted to talk about the fact 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. I know there are countless other startups all doing very important work who would say the same thing. Therefore, it is quite sad to see such a pillar of our ecosystem brought to its knees.
However, it is important to clarify what SVB being an investor actually meant for us at Chipper, especially during a time like this. From a financial perspective, it doesn’t really change anything. SVB made their investment in Chipper in 2021 and we received those funds as soon as that round closed. What is happening now doesn’t change that. Additionally, SVB wasn’t the only investor in that round - we had several other new and existing investors participate in the $100m round - and SVB owns a very small part of Chipper ~2%. Chipper is very fortunate to have a very broad and supportive investor base that has supported us from our earliest days and continues to do so today.
We are definitely living through a very tough and uncertain time not just in our entire industry, but across the entire global economy. The events of this week have only further highlighted this fact, and every business is having to make difficult but necessary adjustments. I speak constantly with other CEOs who are all having to navigate their companies through these uncertain times. For us at Chipper, we have our work cut out for us and we continue working hard everyday towards our mission to enable people in Africa to move and interact with their money freely.
It is probably most important, that in times like these, we all remember that this is a marathon and not a sprint. When Maijid and I set out on this journey over 4 years ago we knew that it would ebb and flow, and that there would be several headwinds and false starts along the way. This too shall pass. There is so much more to be done and we couldn’t be more excited about that.
Onwards and upwards.
Best,
Ham