Episode #242: Ham Serunjogi, Chipper Cash “Africa Has The Highest Cost Of Sending Money In The World”

Episode #242: Ham Serunjogi, Chipper Cash “Africa Has The Highest Cost Of Sending Money In The World”


Guest: Ham Serunjogi is co-founder and CEO of Chipper Cash, a fintech startup that enables free and instant cross border peer-to-peer money transfers as well as solutions for businesses and merchant payment processing.

Date Recorded: 7/3/2020     |     Run-Time: 50:14

Summary: In today’s episode, we’re talking cross border peer-to-peer money transfer. We walk through the reality of limited access to easy and seamless money interaction available to many people outside of the US and other more developed regions of the world. We chat path the road Chipper Cash has taken to develop an easy-to-use P2P money transfer platform in Africa, which has the highest cost of sending money in the world.

We even get into the thinking behind launching the product, resisting the urge to go 0-100 right out of the gate, and taking time to process high-value feedback in order to continue to develop and improve the offering.

Comments or suggestions? Email us Feedback@TheMebFaberShow.com or call us to leave a voicemail at 323 834 9159

Interested in sponsoring an episode? Email Justin at jb@cambriainvestments.com

Links from the Episode:

  • 0:40 – Intro
  • 1:33 – Welcome to our guest, Ham Serunjogi
  • 2:45 – Grinnell College and Warren Buffett
  • 3:47 – Ham’s start in the tech world
  • 5:48 – Inspiration for Chipper Cash
  • 7:58 – First steps to building Chipper Cash and what the state of payments was in Africa at the time
  • 11:10 – How the original vision matches with today’s platform
  • 13:47 – Initial offering
  • 16:00 – Hurdles to building the company
  • 19:05 – Launch and rollout of the platform
  • 24:06 – Challenges to expanding
  • 27:02 – Fundraising for the company and meeting Joe Montana
  • 30:21 – Why people rejected their pitch
  • 33:03 – Growing optimism
  • 34:36 – Their merchant offering and the revenue model
  • 35:41 – How the pandemic impacted growth
  • 39:35 – Surprising use cases of the platform
  • 41:55 – How fraud has impacted the platform and strategy
  • 45:19 – What the future looks like
  • 47:07 – Most memorable moment at the company
  • 48:56 – Learn more: chippercash.com and on twitter at @ChipperCashApp


Transcript of Episode 242:

Welcome Message: Welcome to the “Meb Faber Show,” where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.

Disclaimer: Meb Faber is the Co-Founder and Chief Investment Officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.

Meb: Hey podcast listeners, we’ve got another fun show for you today. Our guest is co-founder and CEO of Chipper Cash, an absolute rocketship African FinTech startup that enables free and instant cross border peer to peer money transfers, as well as solutions for businesses and merchant payment processing. In today’s episode, we’re talking dollar, shillings, and Francs. We also chat Joe Montana and the impact Warren Buffett made on a tiny University endowment. We walk through the reality of limited access to easy and seamless money interaction available to many people outside the U.S. and in other developing regions the world. We chat the road Chipper Cash has taken to develop an easy to use P2P money transfer platform in Africa, which has the highest cost of sending money in the world. We get into the thinking behind launching the product and resisting the urge to go 0 to 100 right out of the gate. Please enjoy this episode with Chipper Cash’s, Ham Serunjogi. Ham, welcome to the show.

Ham: Thank you, Meb. I’m excited to be here. Thanks for having me.

Meb: We just tried to do the show, but you’re whizzing around the world on a train. Where in quarantine do we find you now?

Ham: Back at my apartment in Menlo Park. This is where I am today.

Meb: You’ve made a lot of stops along the way, Uganda, Iowa. Give me the words of the story. How’d you end up in Iowa?

Ham: I wish the story was as exciting as my brother’s because I went to Grinnell College after my brother went to Grinnell College. And he went to Grinnell College because a friend of his recommended Grinnell as a school that he should consider when he was applying to colleges from Uganda. And he applied, and, by the way, that year that he applied happened to be the first year that Grinnell had sent an admission counsellor to Uganda. So my brother got with them first in Uganda and he liked Grinnell, and what he was hearing about Grinnell, so he applied and he got in. And the next year around was my time to apply to schools. My family was keen on me and my brother being in the same place and me coming to the U.S. So I applied to Grinnell as well. And at that point, in my academic career, I was in Mombasa, Kenya. I had done my last two years of high school in Mombasa, at the Aga Khan Academy, in Mombasa. So I was applying from Mombasa. When I got into Grinnell and started in 2012, I was class of 2016.

Meb: The listeners probably won’t know this. You might. Do you know the story behind Grinnell and Warren Buffett and the endowment?

Ham: Yes, I remember those. It’s one of those very interesting stories. I think the college is maybe about 1,500, 1,600 students, so it’s tiny in terms of number of students, and it’s got an endowment that’s massive, almost $2 billion, the endowment. And the story has, a huge part of it has to do with Warren Buffett, who was a very close friend of Joe Rosenfield. In fact, Buffett claimed that Rosenfield was one of his most important mentors. In many ways, Buffett joining the Grinnell board was because Rosenfield asked him, and he did it for Rosenfield. But, you know, there’s also the Intel connection, which finally Grinnell was one of the seed investors in Intel because Bob Noyce, the founder of Intel, went to Grinnell. He’s an alum of the college. When he went out to start the company, he was able to convince Grinnell to invest in his startup. And they did very well. And like you rightly mentioned, if they’d kept that investment, they’d have done even better, but no one is complaining.

Meb: Always obvious in hindsight. After Iowa, you left the Orange Fields, headed west to Bay Area? Is that right? You joined the tech world?

Ham: That’s correct. My Silicon Valley experience started actually in my first year of college, did an internship out here in the Bay Area, and it was at this clean energy accelerator. And that was exciting, and for me, that was my first time, definitely coming to California, but just being in Silicon Valley. And I had been, you know, fascinated with the whole idea of technology being a driver of economic growth and changing the world for the better. My dad did IT and he did computer science in college. He has an IT farm. And for me growing up, I was always fascinated by IT and what it can do to change the world. So coming to Silicon Valley as a freshman in college for my summer was an exciting experience. And for me, I fell in love with the place, its willingness to support all sorts of ideas and a community where nothing is looked down as a crazy or a weird idea. Everything is encouraged. People are risk-takers. You know, everyone’s trying to do something exciting. So being in that space for the summer was great for me as a 21… Wait, no. I think I was 20 at the time. Yeah, I was a 20-year-old. After that, I was committed that, you know, this is what I wanted to do, you know, be part of tech. And so, I got an internship at Facebook, again, one of my college summers. I think was a junior at the time. That was my first foray into big tech working in big tech. And after I graduated, I worked at Facebook for two years. But that was actually in Dublin, Ireland. I moved to Europe, two years. Yep. I worked at their Irish headquarters, which was a fun experience as well. But then two years after that, I moved back to the Bay Area and started Chipper .

Meb: Despite all of its flaws, there’s really no place like Silicon Valley. The energy, and just excitement, and vibe is unlike any other. Dublin also is booming now. I was over there, was it last year? And man, the crane indicator, I think it must have been 40 cranes downtown. But all right, okay. Back to San Fran. What’s the inspiration for Chipper, your startup? This would have been, what, 2018, 2017?

Ham: 2018. By the way, speaking of Dublin, you know what they called Dublin? It’s called Silicon Docks. The area where most tech companies are based in Dublin is this place called Grand Canal by the water, and so they called that part of Dublin, it’s called Silicon Docks, sort of, not Silicon Valley. But, I digress.

Meb: They call my neighbourhood down here Silicon Beach up in, and it’s in Santa Monica. I’m a little further south. All right. Back to 2018.

Ham: Really, this story kind of started actually in college because my co-founder, who I met in college, is also from Africa. He’s born and bred in Ghana. I’m born and bred in Uganda, I’m not sure I mentioned that earlier. We met in college. He was two years older than me, so he was a junior when I was a freshman. We hit it off in terms of how aligned we were, in the sense that we strongly believed that growing up in Africa, we had all those experiences and these insights, run some of the problems that still faced a lot of Africans. And having the privilege of being trained, and educated, and exposed to life in the West, we felt gave us a really great opportunity to sort of marry those two things, bridge those two worlds, and build a solution that could impact a lot of people at scale. And so we tinkered with a few projects while in college. And after we graduated, you know, we stayed in touch and kept thinking about what areas can we make an impact in? And payments within Africa was a clear opportunity to go and take a stab at doing something there. No one had really done anything around payments within Africa. Most of the focus had really just been about, are on remittances. You know, we were quite aligned in that sense. And in 2018, that’s when I made the move and said, “All right, this is important enough and I think the time is right,” thought that I had, I’d spent at Facebook, I felt would have, in many ways, been too costly in terms of the missing the opportunity that we thought existed in the market at the time. 2018 is when I moved back to the Bay Area. That’s when we really put our efforts into full force and launched the company.

Meb: It’s a pretty ambitious undertaking for two guys to say, “Hey, look, let’s tackle payments for an entire continent.” What were sort of the first steps to building this? And also, would love to hear a little more about the current state of payments was. Like, you would think that around the world, payments would be somewhat standardized and that many of these big players, like the Venmos and Squares, and all the big guys would be there, but it doesn’t seem like that was the case.

Ham: Yeah, it wasn’t the case. And I’ll get to that in a minute. But you are 100% correct in saying that it was definitely a big… It was quite audacious for two 20-year-old first-time founders, you know, African guys, coming out of Silicon Valley and trying to do something. And I think for us, like, people say, “Ignorance is bliss,” and the statement is incredibly true. For us, you know, we were just obsessed with what we saw as the opportunity, and we didn’t really spend too much time worrying about all the incredible obstacles that were in front of us. I mean, we had to figure out a lot of things. You know, immigration was one of those things. Both myself and my co-founder at the time were out of the country before we started Chippers. We had to figure out how do we get our immigration in order and, you know, move back to the U.S. and work, getting the company off the ground, you know, trying to raise money. So there was a number of really large obstacles. In hindsight, if you looked at it objectively, you’d think that you’d be incredibly stupid and crazy to try and do this. You know, like I said, to us, it was important enough that we wanted to take a stab at it and we felt quite strong that we had a working solution. And to your question around sort of the landscape at the time, I think, again, in many ways, what just was unbelievable to us was that we take so many things for granted here, people who live in the U.S. or in Western Europe, or pretty much in the West, around how easy it is to, you know, interact with your money. Go to a coffee shop and you can swipe your card, you can use Apple Pay.

You go get lunch somewhere and, you know, you can even more friend after you check. It’s just really easy, and you take for granted how seamless that is. A lot of people in the world still don’t have that level of convenience or on how they interact with their money. In Africa, it’s still, in many ways, in the early stages of that space, evolving. Mobile Money, which was launched with M-Pesa in Kenya, has done tremendous work in lifting people out of poverty and just include improving the social-economic order of things, and particularly in Kenya and Eastern Africa, how accessible it made formal financial services. And that’s just kind of going from 0 to 1, you know, from people being able to actually digitally send money from one person to another and not having to store, you know, hoards of cash under their beds or in physical cash, and being able to digitize that. But then, how do you get from 1 to 10? How do you then enable people to not just be able to store money digitally, and send it to a few people, but be able to send it across borders, be able to make online payments, and be able to access other instruments, like savings or investments and whatnot? And to us, that’s what we looked at and said, “Wow.” In 2020 or 2018, at that time in San Francisco, is so much farther ahead than the rest of the world that sometimes you forget and take things for granted. But that represented the opportunity that lies in being a part of the solution for a lot of people who don’t have access to these formal services. And that really was the driving force behind Chipper.

Meb: Tell me a little bit about what were the first steps? Was it just two guys starting to code out of a bedroom in San Fran? I mean, that seems pretty ambitious. What was the original vision? This wasn’t that long ago, two years, you know. Is it in line with the same idea you have today?

Ham: Absolutely, still the same. The vision has always been to make it incredibly easy, cost-efficient for people in Africa to send money across borders. Africa has the highest cost of sending money in the world. It’s the most expensive to send money in Africa than anywhere else in the world. And so that’s a huge barrier. It’s, you know, incredibly fragmented. There’s, you know, different solutions in different countries that all don’t speak with each other in terms of, you know, interoperability. So just being able to say, “We’re building a platform that can let someone in Nigeria send money to someone in another country very easily,” that vision still remains true today. But, you know, first steps, I think, as with anything is just trying to learn more, you know, understand exactly what you’re getting into. So, you know, whenever I’d go back home for the holidays, you know, I’d spend a little time just talking to people and seeing what people on the ground were using and people’s expectations and where space was at a time. Because, I think the things that make any company being launched more likely to succeed versus fail goes beyond just technical ability of the founders or the idea and the strength of the idea. But it also involves, I think, being in the right time and at the right place. And I think a lot of things have to be right in so many ways for a solution to have a chance to succeed.

You know, if you look at any industry or any company that’s scaled quite well, Jeff Bezos says all the time, if you look at Amazon, but he was able to launch Amazon at that time because there was a bunch of other infrastructure that was laid before Amazon, that Amazon could leverage. Whether it was, you know, the shipping industry, the mail industry in the U.S. or the internet being available, or payments being at a point where people could pay online, you know, those are important things that had to happen and be in that place for Amazon to succeed. If you had tried to launch Amazon in 1969, it wouldn’t have been successful because you wouldn’t have had, you know, the advancements in payments, and the internet, and shipping to support that sort of thing. And then the same thing is true for any industry, and particularly for us. You know, the industry being at a point where we could, you know, build on top of existing solutions that weren’t there 10, 20 years ago, has a strong impact on if we’ll be able to scale something, you know, in a meaningfully successful way or not.

Meb: What was sort of the offering when you guys rolled it out? Walk us through kind of how you envisioned it working.

Ham: Imagine how you use your Venmo today or your PayPal. In addition to Venmo just working to the U.S., try to imagine if it actually worked across the world, if you could Venmo someone in Europe or someone in Asia. That’s what Chipper is to people in Sub-Saharan Africa. That’s the intention of what you want it to be. It’s a platform. It’s a P2P app where you can connect various payment methods, it could be a bank account, it could be a mobile money account, and you can use that to credit and debit your Chipper Wallet. And when the money is in the Chipper Wallet, you can send it to someone else pretty easily the same way you’d send a text and the same way people in the U.S. would use Venmo or PayPal. And, again, one of the things I just wanna emphasize is, I think exposure is powerful because it kind of shows you in many ways things that you take for granted. Those two years I spent in Dublin, in Europe, I remember so many times telling people, if we’d go out for drinks or whatever, you know, afterwards, you know, whoever picked up the tab, wanna pay them, and I’d say, “Do you have something like Venmo?” And the concept of an app that did peer to peer payments was so foreign to them.

In Europe, you have to go into… Typically, your bank has an app that you use to send to someone else but you have to get their bank account number first, then you can send it to them via your bank app. It’s not as simple as Venmo is. Even… And that’s Europe, right? But even in Europe, the idea of peer to peer payments hasn’t quite caught on the way it has in America. That exposure sort of puts in perspective how sometimes, you know, we assume that because something works very easily where we are, that that’s the case for everyone else in the world. And so, building the product initially to be able to just have a very basic peer to peer setting of money for us was our key objective and remains our key objective. That’s an important problem for us to solve, and we knew how broad it was just because of our life experiences growing up in Africa and seeing how many people had to pay really high fees or, you know, stand in very long lines to send money to another country.

Meb: What was the major hurdles in building it? Why was it so hard? Do you have…? Is it regulatory? Is it courting with all the various financial intermediaries? Is it banking-related? Kind of walk us through all the challenges and struggles. I know we only have an hour. Why is this so hard? Why was this an unsolved problem in 2018?

Ham: I think the main ones are, and I think, at a macro level, it’s mostly around the ecosystem and how the ecosystem plays a really big part in different solutions scaling well or not. And it’s very hard for a company to be both vertical and horizontal. And what I mean by that is, in every industry, most companies often have to work with another partner to support a part of their business that they shouldn’t spend time building out. For example, the reason why Stripe is powerful is because it takes away the need for every e-commerce company to build a payments system in their product, and so that company can just focus on what they do well, which is, you know, if it’s making shoes, or if it’s food delivery, or whatever it might be. If a company has to focus on what its core product is, and then also build out everything else it needs to rely on, whether it’s payments or infrastructure. For example, again, AWS is another example, right? A lot of internet companies today don’t have to worry about how do I build up all these servers and all, you know, the software that will run on those machines, and redundancies and all those things because Amazon can do that for you and all you have to is focus on building your product and leveraging the existing scale of AWS. But if you had to do both those things, if you had to build your product and then also build infrastructure to support the back end, it just makes it that less efficient, you know, makes that more difficult because then you have a lot less resources to do what really you want to do.

And I think the ecosystem in many ways, being very young, I think is probably the biggest, I think hurdle and it is the biggest hurdle today for a lot of people that are building same solutions, whether it’s in Africa or Southeast Asia or many of these emerging markets, it’s that you have to build your product, then you have to build it everything else that supports your product. Even if there are solutions that might support you in that regard, many of them are still, you know, very young and aren’t mature enough yet that they can scale as fast as you want them to scale and things break very frequently and you have to have even more redundancies than you need to have. And so, those things all require more time, more capital. They distract from what you actually you want to focus on, which is your product, and all together make the, you know, endeavour that much more difficult. So I think that still remains to be the biggest piece to, I think, emerging markets as a whole basically being able to have robust ecosystems and make scaling products very efficient. You have every other problem that comes with running a business, which is, you know, how do you actually get your first customers? You know, how do you, you know, raise money? How do you actually build technology that can scale? You know, how do you put together a team that, you know, can do, you know, what you need to get done? And so all those things, in addition to everything I mentioned about the ecosystem.

Meb: Good. I wanna hear about all those things. It’s funny as you talk about that because it resonates with me. We’ve been using Stripe Idea Firm Research Service, it’s got to be 5, 6, 7 years now, same thing. It’s just like, why would you ever wanna be involved in something that… It just creates, it makes life so much easier? All right. So let’s go back to payments. All right. So problem, you know, it’s expensive. You couldn’t really do cross-border. You mentioned a lot of Africa, it’s mobile phones is a main way that people wanna exchange across borders. How did those first transactions happen? Was it through app-based? And kind of talk about how you did eventual launch and rollout.

Ham: First, V1 of our product was actually web-based. We had a very basic web, essentially interface. And the reason why we did it that way was because, at the time, we had two meetings where about it. We didn’t have the time and ability to focus on building the native apps, iOS, and Android. So a web solution was the silver bullet at the time, inverted commas because it wasn’t really a solution. But it allowed us to put out a product out there that early adopters could use. We didn’t have to worry about building iOS or Android or supporting native apps at the time. So it was a very, very primitive version of what the product is today, which is much more complicated and sophisticated. The earliest people were… You know, again, it was very much word of mouth, you know, talked to a few friends, my family, talked to a few other people, and just really collecting feedback and saying, “You know, what do people like about this? What do they not like about this? Is it actually solving a problem that we think it should be solving?” And those initial, you know, 10, 20, 30, maybe even 100 users were incredibly informative in us being able to say, “These are the areas that we need to double down on as far as reducing pain points for people, and this is where there’s gonna be a bit of a challenge in terms of whether to rely on a third-party partner or just us having to figure out a solution for that particular problem?

But the first I’ll say a couple of weeks, maybe even a couple of months, it was a very primitive web-based solution. And then we made a big push and we launched the Android app because Android is by far the most prevalent operating system in Africa. We got the app out there, and that made a huge difference in terms of how seamless it was for people to use the product and how much more they actually enjoyed the experience. So we’re able to get higher quality feedback, did help growth a little bit. And then we started to focus a little bit on getting some press in local media outlets, and trying to increase our visibility, kind of take it a step at a time in that sense. Because, I think one of the biggest mistakes that a lot of first time products like ourselves would make most times is trying to just get from 0 to 100. There’s actually a very important process of going from 0 to 1 first because you get some very high-quality feedback. And if you can get the first, you know, couple of hundred people very happy with your product, then they’ll bring on the rest. But if you just rush and try to get as many as possible and it’s a bad experience, then you put yourself in a hole that you don’t want, you know, try to have to work yourself out of.

Meb: What was the initial rollout? Was it in Uganda?

Ham: Yes, Uganda was the first market we launched in. A few weeks after that, maybe about a month or so after that, we launched in Kenya. Those were the first two markets were launched in 2018. But Uganda was the first. I remember the day we actually put the app out there and started to see initial reactions from people. And I remember having a very lengthy discussion/debate with my co-founder at the time. His viewpoint at the time was that we need to highlight that this is a beta because the app was still very buggy and we’re still trying to figure out a lot of things. So we wanted to add beta in the App Store. And I said, “If you put beta no one will use it,” because with a trust element that gets very hard to overcome at that point. And we went back and forth around, “Should we put beta or not?” And then eventually, I was able to convince him and we didn’t put beta. We were out there and tried to get some really high-quality feedback. Those initial people were so important to us. Every user today is very important to us. But we would obsess, my co-founder and I, we were quite obsessed with giving people a very good experience. That’s one thing that we would never compromise on. I would literally physically call every single user we had, and say, “Hey, we noticed you opened the app, and you did this, but you didn’t complete the action. Did something happen? Did it break?” Late at night, phone calls with users and trying to see, you know, what was happening and just making sure that every single user at the time knew that we were serious about this, but then also that we would listen to them if they didn’t like something about the product. That was a very interesting experience. You know, in many ways, it allowed us to hear more, in terms of what people actually liked and didn’t like, and that’s an important part of the whole development cycle of anything. Those were exciting times in many ways. Part of me actually admit was that direct connection to people sometimes, to users sometimes. But, you know, when you scale, which every business wants, there’s some things that you can’t keep scaling. So…

Meb: Talk to me a little bit about how it works, because I imagine the complexity of launching an app where you’re saying you’re doing these across countries where you’re exchanging shillings for francs for all sorts of different things, dollars, I have no idea. How challenging was that? Once you, okay said, “We have the peer to peer,” did the merchant side come later? What was kind of the expansion? So this would have been what? The launch would have been 2018, 2019?

Ham: Yeah, this is late 2018.

Meb: Late 2018. And then what was kind of the timeline after that?

Ham: And so really pretty much from, I’ll say September or October 2018 to December was just trying to ramp up in Uganda and Kenya and, you know, all the initial bugs that were getting caught, build that really important trust to the early adopters. That was the focus at that point. It was just putting out a bunch of fires really. And then in 2019 was really when we put the hammer down on scale and growth and we, you know, essentially said that we need to essentially move 10 times as faster as we were before. One of the powerful things that we also learned at the time was that ultimately if you’re not able to communicate to people what you’re solving, it doesn’t matter how well your solution is. And I think we focused a lot on building the most slick product and the best solution in our minds, but a lot of our users, because, again, I mentioned that we take things for granted, a lot of our users weren’t familiar with the whole idea of a P2P app where they could connect to a payment method that they could credit and debit their wallets with. And there was an educational curve that we had to take users through. Again, those are the learnings that you get, you know, in that initial 0 to 1 phase. And so for us, 2019 really, that’s when we went into Ghana, to Uganda, Rwanda, Tanzania. That year was really when we essentially took what we had launched in late 2018 and applied that at scale and focused on taking that same approach, iterative learning approach, and then scaling it out as fast as we could. And so 2019 was a big year for us as far as growth went. It came from a couple of thousand users in January 2019, you know, 2019, with just under 700,000 users. That was a big year for us. Again, the focus there was, you know, listening to what people are saying, being mindful that innovation sometimes goes both ways, right? If you solve a problem, you have to also be able to communicate that problem otherwise you haven’t really solved the problem. And then obviously, you know, the other aspect of scaling, anything that come along with scaling, which is the infrastructure to support that growth, the ecosystem, managing all the different partners that we’re working with to support the different aspects that we needed. You know, looking back at how that whole evolution has happened, the ecosystem in many ways is much more advanced today than it was when we started, and I think in large part to people like us who have had to push it forward and, you know, require our partners to be that much more reliable and the stresses of growth of a product that ultimately make it better.

Meb: So you guys started to find that little product-market fit. The big advantage, of course, that you guys have on the peer to peer was cost. A lot of the incumbents and legacy offerings were super expensive and still are. Where did the fundraising start to happen? Is that 2019? And tell us about how you met Joe Montana.

Ham: I’ve been fundraising from the very beginning. Again, this is one of those classic ignorance is bliss scenarios, because I thought that, you know, with a really nice and well put together deck, you know, I could go and speak to investors and, you know, get them to put money into our company before launching a product and speaking to people that had very little exposure to the space that we’re going to be tackling, which is Sub Saharan Africa. That experience was incredibly difficult. Raising money, initially, is hard for anyone. As a first-time founder, I’m doing it in Silicon Valley, an African guy, having to also teach people about the space we’re in just compounds the difficulty. I keep telling my co-founder, one thing that entirely grateful for is that he’s hands-down the best engineer that I know. And he was able to build this incredibly great product, which made my job that much easier when I got the pitch to investors because, you know, we have a really powerful product to show for it. But at that time, we had no product yet. It was just the deck of the idea. That was a brutal process. And the rejections that we’ve got were, I kind of count them and, you know, it was countless. And, you know, we were burning through our savings because we bootstrapped at that point. Essentially, we have a clock, a deadline, in terms of how far our capital can go that we’re living off of. That time I’m staying at my co-founder’s apartment in San Francisco and I think we got to a point where we were about maybe a month or so away from being able to make rent, being able to not make rent. Those things just make you incredibly stressed out and, you know, you have to compartmentalize that part.

You have to focus on the product you’re trying to build. You have to try to find the initial users. We’re now at a scenario where it helps us figure out our integration, and, you know, those things just mixed together made it incredibly difficult. But eventually, I was able to meet Sheel, who was our first investor. And Sheel was literally the first money in, that literally took us from the edge, the cliff to being able to have the capital to just, you know, have a roof over our head and actually be able to support, you know, the growth that we’re seeing at a time with, you know, a couple of thousand users, but that’s more than our budgets could support and we knew when to clip on our savings. That’s late 2018. 2019 comes around. We, as you mentioned Joe Montana, one of his associates reached out to me to set up a meeting, and we spoke with him. You know, he was excited about the product. And he was, you know, like ourselves, quite aware that there’s a ton of growth that’s gonna come from emerging markets like Africa, and he wanted to be able to support and participate in that. And so our initial run was led by Deciens Capital, Dan Kimerling is a good friend of Sheel, and Sheel introduced us. And I had some really great meetings with Dan. We met maybe two or three times before he made the decision to invest. So, you know, after we started to grow, get some traction, that aspect of my job, which is fundraising, became significantly easier. Still very hard, but significantly easier.

Meb: You know, it’s so funny you mentioned the entrepreneurial story that I imagine so many people on this podcast listening can resonate with. I mean, we had this same experience for years with my company, where it’s almost like the Wile E. Coyote, Road Runner, you’re out over the cliff, just, like, pedalling in the middle of air, and you have this vision and idea but cash is just slowly depleting. What was the major response from most of the people that were the knows in the funding community? Was it, “Hey, you can’t compete with the M-Pesas or Square or Venmo. It’s just gonna dominate or it’s just too hard.” Like, what was the main reasons people gave the no?

Ham: Maybe all the above and more. And I think one of the things also want to clarify is that we actually, and I told us to this to investors all the time, we’re not trying to compete with M-Pesa. You know, I keep pinning the analogy that M-Pesa is to us what Wells Fargo and Bank of America are to Venmo, PayPal, and Square Cash. Those products sit on top of Bank of America, the bank infrastructure in America. We similarly sit on top of the infrastructure that mobile money has laid in Eastern Africa. So we’re not trying to compete with them. And in fact, their growth drives our growth and vice versa. So, more than anything, we work very closely together. But just being able to explain that and clarify that to people, and say, “There’s a very specific need we’re solving here.” And trying to figure out how large it was, was a very difficult battle not just for investors in Silicon Valley, but investors in Africa. You know, I was getting very similar, you know, responses on both sides of the aisle. In Silicon Valley, though, I think the most common one was, you know, “I don’t know, Africa, blah, blah, blah. I don’t know if there’s a big opportunity there.” You know, the few who, you know, maybe I got a second meeting with or didn’t say no the first time thought that they could get a massive discount on our valuation just because we’re doing a company in Africa. And there’s just a lot of things that you have to sort of work your way through to explain things to investors in a way that makes sense to them, but also doesn’t sort of paint you as just being unrealistic, and naive, and being untrue to reason. And that as particularly true for us because, in many ways, well, I just want to say, for us to fundraise, in many ways what I was presenting was theoretical because it was just a deck. We hadn’t built the product yet. So, it was highly subjective in many ways. I think as we scaled and grew, we were able to show traction and, you know, speak more to… It was tough to have to not just show people the opportunity, but…

Meb: We’ve watched this go rocketship over the past 12, 18 months. After you had the first round of funding, what was the moment when you kind of started feel, “Okay, wait, this is starting to catch on?” Was there a moment where you felt, “This is happening. This is working?”

Ham: We’ve always been optimistic about what we’re building. I’ve never been optimistic now, given how well everything’s gone and everything has exceeded our wildest expectations. We were so adamant and so committed in our belief that this was a powerful product. But to answer your question around, you know, when you have that moment of, “Okay, it’s real now,” I think it’s probably when you close your first round and then you actually have that added responsibility of managing self, you know, money, money that isn’t just yours, but that represents someone else taking a bet on you. That added responsibility sets in more as a company scales, as you have more employees, as you have more capital, as the stakes get higher. I keep telling this to the team as well. And, you know, when we closed our last round, I sent an email to all our employees. I was essentially saying that, you know, “This is great and everything, but we still have such a long way to go. You know, we’re not there yet by a longshot.” It’s important to maintain that perspective because it humbles you. And it’s true, we have so much more to do. It’s great to be proud of what you’ve accomplished, you know, to a certain point, but it’s important to remember that this is a journey of 1,000 miles. We’ve done 1% of the first mile. There’s a lot more to do and that we need to keep our heads on different scaling.

Meb: Walk us a little forward closer to the present. So 2019, you’re into what, seven countries? Tell me a little bit about the merchant offering, because that kind of plays into a little more of the actual business model and where you’re gonna see majority of revenues. Is that right?

Ham: I don’t have a comment of the revenue projections, honestly, but to be able to speak about that publicly. But one thing is that, yeah, the merchant side of our operations is a key revenue driver for us going forward over the long-term. And really how that works is that because we have a really fast growing and large base of peer-to-peer users, a lot of merchants want to tap into that base, collect payments for those people. So, we’re able to build a product called Chipper Checkout, which allows merchants to, you know, with one link, send it to other people, and those people can use that link to pay them. And on those merchant transactions, the plan is to monetize those and make a small fee of those. We have a lot of excitement for that business, scaling that as we keep growing our P2P offering as well.

Meb: As kind of 2019 ended, you guys found yourself just rocking and rolling, I guess, the Series A, maybe around then, I think, closed a couple. But talk to me a little bit about you got all the challenges of running a business and all of a sudden, you got a pandemic thrown in. What’s 2020 been like for you guys? And how’s that impacted or, you know, changed how you guys do business?

Ham: So we just closed our Series A, which was a few weeks ago. But you’re right, we’ve done three rounds total in the last 12 months. The first round was a seed round, and we did a seed extension, which is the second round out in the series A. Now, 2020, it’s been an eventful year, to say the least. And I think every business out there has essentially, you know, had the ground under their feet shifted in some way. A lot of CEOs have had to make very tough decisions around laying off people and, you know, adjusting operations to survive in this new world. We were mindful about that in our company internally around, how does this change what our plans are? How does it affect everything else that we’re trying to do? But for us, the first thing that we focused on the leadership team was to take care of our employees. You know, we were very early on making everyone work from home, obviously encouraged people not to travel at all for work definitely, but even for personal reasons, just out of, you know, being safe. And then we also supported our employees financially. We moved up payroll about a week early in many markets or many of our offices around the world, so people get their money early, essentially be able to stock up ahead of time and just be more prepared. We’ve also offered additional financial assistance to employees to be able to better support their families and loved ones and essentially, have our employee community be a source of support for everyone. And people know that we are part of that family as well and, you know, we’re here to support them on the long-term, not just you know, this month of this quarter.

And the idea is that, you know, you don’t want people to be worried about everything else in life when they work because then they’re less productive in their jobs. And our goal is not just to maximize productivity. It’s to actually have people professionally grow in their careers as well while they’re with us. In our monthly all-hands, a couple of months ago, again, earlier in this crisis, I made a pledge to all employees that we won’t be laying off anyone. And so people also had that added job security. And so for us taking care of the team was a huge…doing that right was important to us. And then after that, being mindful of the macroeconomic effect and saying, “How does this affect our users, and how best can we, you know, stay true to our mission and our vision in this new world?” You know, being able to listen to what people are saying, see how operators either are being more important to them, being a place where they can still count on for a great service, playing a more crucial role on their lives, was something that we saw definitely happen as this crisis deepened because a lot of people had that much more need to either support a loved one somewhere or receive money from someone else. It became more important to us to make sure that we are serving our users in the most reliable way. You know, if we’ve go down for even a few minutes, you know, negatively affects somebody in a very meaningful way, that this is not just about metrics and hitting goals internally. It’s actually about, you know, positively impacting people’s lives. And if you don’t show up or you don’t do a good job, then you have a negative impact on people’s lives. And this is too important not to get right. You know, it gave us that much more responsibility and I think also empathy to make sure that we did everything we could in our power to be the best version of ourselves for our users as well.

Meb: What has been some of the surprises, if there have been any, or use cases that people, you know, have been using the app over the past couple of years? Like, what you expected, where people are just exchanging money in the same way they would through Venmo or is it that the concept of remittances been interesting or a surprise to you guys?

Ham: I think at a high level, you know, what I can say is that it’s mostly been in many ways what we expected, which is people supporting loved ones or family members, you know, back home or wherever they may be. And I think what, if anything, that we’ve seen happen more of is that frequency or need in terms of, for example, whenever sometimes let’s say, one of our Heroku goes down or something happens and, you know, the app is, let’s say, you know, offline for, you know, five minutes or so, because some demos have to be reset or something, you usually have a flood of people write and say,” Hey, I can’t use the app, blah, blah, blah. You know, when is it gonna be back online?” When COVID happened, the intensity of those sorts of, you know, feedback requests was interesting to see, because it came from “Hey, you know, when will this be resolved, to I need this resolved right now.” And that was pretty much across the board. It was one of those things that kind of to us indicated that the stakes are higher for people as well in this post-COVID world, in that, typically, the types of transactions people are making are more around things that are necessary and not so much around things that are, you know, once or less necessary. And so, being able to do that is of more importance. Like, I said, if I’m sending money to my friend to split the bill for dinner, if that is a day late or a couple of minutes late because Venmo isn’t working, that’s fine. But if I need to send money to my friend because they need to support a relative in a crunch, then I really need it to work, you know, right that moment. I think seeing more of that has probably been one of the indications to us that the bar has been raised on us in that regard. I’m incredibly proud of our team and our engineering team has done a really good job to make sure that, you know, in any given scenario, we have a ton of redundancies that we we’re almost never down, you know, primarily because how much more important we are now to people, you know, in this post-COVID world than we were anytime before.

Meb: I feel like a lot of people’s concerns when they hear African bank FinTech transactions, one of the first things that will come to mind to listeners is all the Nigerian Princes. How hard is an issue of fraud for you guys? I know you made a recent hire in that space. Has that been a big challenge, something you kinda went into it with eyes wide open? What’s that been like?

Ham: Fraud is, any FinTech company in the world, that’s an area you have to invest in. And you’re right. I think it reflects in our Chief Compliance Officer who joined us recently, about two months ago. And we know we’re investing a ton, you know, in our compliance efforts. I mean, we’ve invested millions of dollars every year in compliance and AML work, AML being anti-money laundering work, and making sure that our platform is as safe as it can be. Now, there’s also a misconception I think that it is important to address, which is there are people who try to scam others and, you know, the Nigerian princes, one, is a classic example that everyone knows of. But that is so incorrect as far as being a reflection of most people in Nigeria or in Africa, dealing with money. And I think this is one of those things where, you know, empathy is really important. And we speak about empathy a ton in our company and encourage everyone in the company to be as empathetic as they can to each other, and also to people that we work with. Most, 9 out of 10 people who are, you know, doing a financial transaction in Nigeria or anywhere in Africa are not trying to scam anyone. An attempt which might be, you know, suspicious or fraudulent, oftentimes does not involve a Nigerian prince trying to scam someone. So, my point is to say that, I don’t think fraud is any more prevalent in Nigeria, as a function of society than it is in other parts of the world or in the U.S., for example.

But the unique challenges around how you combat fraud and how you build a safe platform, that will vary from region to region. And so your approach to building solutions that can mitigate that risk will look different, you know, in Nigeria or in Ghana or in Kenya than it might look in Southeast Asia, or in Europe, or in the U.S. One of the things that we’re very happy about is that, and I can say this very proudly and, you know, we take the utmost care for how we protect users, in terms of how transparent our platform is, the safeguards in place that people that don’t get duped, the walk, we didn’t verifying, whoever’s on the transaction is actually who they say they are. So whoever is on the platform is actually who they say they are. We have, I think, a very good record in that sense. And it can be one thing for me to just say this. I mean, you know, it’s all right if a hand is biased, but the space way in is a space where if you don’t do a good job if your platform doesn’t save, people want to use you. You know, like, it just, it just breaks in many ways. Every time someone uses a transaction, it’s also a vote of confidence. You know, a platform like ours, which grows predominantly via referrals, it’s someone else will tell someone else about us. The minute those referrals become bad, and people say, “Oh, actually don’t use these guys. These guys are fake,” it’ll come crashing down. That is an unbiased, I think, indicator of the fact that we have taken great care to make sure that it’s a very safe platform and that people actually have a great experience using it. And it shows how people refer the product other people in their lives or the communities and our general brand, I think, image on the continent and beyond.

Meb: As we find ourselves in the summer of 2020, you guys have had quite a run, you’ve launched the app, it’s gaining traction, you’ve done a few rounds of financing. What does the future look like? We turn our eyes to the horizon 2020, 2021, 2023, 2025. What’s your vision for the future?

Ham: We have an exciting roadmap. And I think you might know about this more than most because of your proximity to the company and your access to some of our internal comms that I send out to our investors. What I’d say publicly is that we have a very exciting roadmap. We are building this company for the long term. This year is gonna be a consequential year for us on so many levels, and we have some pretty exciting stuff coming out. You know, to us, we are staying true to our objective, which is improving the state of financial services to people living in Africa and beyond. There’s a lot of what still remains to be done, but, you know, we are on our way. Every milestone we keep reaching, you know, we get more support from our community, our users, our investor base, and we become that much stronger as a company to actually fulfill our objectives, which are meaningfully changing the way people move and interpret their money in Africa. So you know, to us, the future is scaling to more people, making our platform redundant and as reliable as possible, continue to listen to our users and meet them where they are, which is providing the services that they want and make sure that we are actually solving problems that are meaningful to them and not just problems that we think are meaningful to them. That’s probably as much as I can say, without giving away a lot of the exciting stuff that’s coming up. There’s some really exciting stuff that we’re working on right now and I can’t wait to have it all roll out.

Meb: Do you think that there is a possibility that Chipper would ever expand beyond the shores of the continent?

Ham: I think anything’s possible.

Meb: Ham, this has been a lot of fun. What’s been the most memorable moment of your tenure at Chippers? Anything that comes to mind, good, bad in between? Anything that’s seared into your memory?

Ham: On that spectrum of absolutely freaking out nervous breakdown, complete joy and bliss, you kind of go through that entire spectrum as, you know, if you, as most founders do. And, you know, I like I say, I think the best is yet to come for us. It can be more optimistic, we have a long way to go. So, you know, we don’t fool ourselves in any way that we’re there yet or that, you know, we’re done or we can take a break now. But, you know, most memorable moment. That’s a tough one. There’s several. You know, for me, you know, the first term sheet that I received, you know, that’s pretty memorable. First time we had over 100 users, that was pretty memorable.

Meb: All in your family?

Ham: I have a very large family, but I don’t think it’s that large. Maybe 50 were my family. I’m joking. I’d have to think more about which one is the most memorable, but there’s been several, I mean, Moujaled and I, my co-founder, we sometimes just talk and appreciate everything that’s happened for us to get to this point. I mean, we’ve had, like, I said, incredible highs and incredible lows along the way. And I think there’ll be more of those, they’ll change in terms of what may be stressful at the time as to what was stressful two years ago. There’s ups and downs in any journey and I think this is no different. And overall, I think we’re the luckiest people in the world. We’re doing exactly what we love. We’re living our dream. We know we get to impact people’s lives positively while we do it, and that’s incredibly rewarding. I think we’ve been incredibly fortunate to be where we are today. In any scenario, regardless of factors might work against us and for us, no one can complain and say that things haven’t gone well. We’re incredibly grateful for that.

Meb: Where do people go if they want to find out more about your company, what you guys are up to, follow along? What’s the best places?

Ham: Well, I think that this podcast is a great start. But our website has a ton of information, chippercash.com. We always make sure that we’re providing as much information about who we are and where we’re going on that online presence. Obviously, our Twitter, social media team does a great job engaging with our users and having that be a source of interaction with our users and providing information. So it’s @chippercash app that’s on Twitter and Instagram as well. I still do reach out to many of, you know, the very early users once in a while, just, you know, catch up with them and see, you know, how things are going. So, for those people who have my number, you know, they can always text me.

Meb: Awesome. I love it. Ham, thanks so much for joining us today.

Ham: Thanks for having me. This was a lot of fun.

Meb: Podcast listeners, we’ll post show notes to today’s conversation at mebfaber.com/podcast. If you love the show, if you hate it, shoot us feedback@mebfabershow.com. We love to read the reviews. Please review us on iTunes and subscribe to the show anywhere good podcasts are found. My current favourite is Breaker. Thanks for listening friends, and good investing.