Wave, an African fintech offering mobile money services in Senegal and the Ivory Coast, laid off about 15% of its workforce last month. australiabusinessblog.com first got a whiff of the layoff news on LinkedIn, where Jessica Chervin, a former Andela executive who joined Wave in March as an expansion leader, wrote that she would leave the company.
“Like many tech companies, Wave has been rapidly adapting to the shocking changes in capital markets in recent months and like the best of them (and more importantly, as a financial institution), it has had to call really hard to make sure it can provide customers in existing markets now and well into the future,” wrote Chervin, who is also an angel investor. “This vital shift in strategic priorities means that I and many others are leaving Wave much sooner than anyone had hoped.”
australiabusinessblog.com reached out to Wave for comment on the matter, and a spokesperson confirmed that “nearly 15%” of the company’s nearly 2,000 employees had been laid off. For example, the layoffs affected nearly 300 employees, most of whom worked in Wave’s new markets: Burkina Faso, Mali and Uganda.
According to a statement released by Wave to its employees on June 30, the company said it was scaling back its teams in these markets as part of efforts to ensure it isn’t reliant on new funding at a time “when investors around the world.” economize.”
Wave said its decision to pull out of newer markets will help it double down in Senegal and the Ivory Coast, core markets “where we are market leaders in mobile money with growing businesses,” while continuing to serve its new markets.
In 2020, Wave officially spun off from Sendwave, a remittance platform that WorldRemit acquired for approximately $500 million in cash and stock. The company, which made a stealth launch in Senegal two years earlier, has since raised more than $290 million in equity and debt to date. The company, run by Drew Durbin and Lincoln Quirk, was valued at $1.7 billion in its latest fundraiser last September after raising $200 million, the largest Series A in Africa. It was led by Stripe, Sequoia Heritage, Founders Fund and Ribbit Capital. The startup’s other investors include Sam Altman and Partech Africa.
Wave’s platform is similar to PayPal (with mobile money accounts, not bank accounts). It operates an agent network that uses cash to serve customers who can make free deposits and withdrawals and are charged a 1% fee when they send money.
The company is disrupting the mobile money industry dominated by banks and telcos with its app-based solution, cheaper rates and QR-based technology. And despite the ongoing bickering with these incumbents over eating their market share, Wave claims to serve more than 10 million users monthly in its operating markets.
Wave is the first unicorn from Senegal and the entire Francophone region of Africa. However, the staff covers the five markets, Tunisia, Kenya, USA, Germany, Nigeria and UK. The company spokesperson said a small percentage of the laid-off workers operated remotely in these countries.
“The people we part with are some of the brightest and most dedicated in our industry. Letting them go is one of the hardest decisions we’ve ever had to make as a company,” the statement read. “We regret the impact on employees and their families, but we believe the best way to honor these colleagues is to ensure their contributions are lasting. Wave is offering enhanced benefits and packages to all employees involved to show our deep appreciation for their valuable contributions, hard work and dedication.”
Layoffs have become the norm as rising interest rates and a prolonged bull run that has swept private and public markets in recent years have made life difficult for tech companies, among others. Amid fears of a recession, investors are being strict with their money, mostly toward growth and late-stage startups. As a result, startups had to cut costs and cut staff to survive; those who have had some success raising capital have had to adjust to prepandemic valuations.
Big Tech companies have fired (Microsoft) and suggested firing (meta) Staff members. Small to large startups in various industries such as Substack, Hopin, Coinbase, Bolt, Byju, Twitter, PayPal and Tesla have also downsized. And while it initially looked like the knock-on effect would take a significant amount of time to reach Africa, news of layoffs from mobility startup Swvl and health tech company Vezeeta made the rounds last month.
But just as the situation was not dire for Swvl and Vezeeta, it is not so for Wave. The Senegal-based startup probably has enough cash in the bank for years to come, and last week it was secured a €90 million syndicated loan from the International Finance Corporation (IFC), Lendable, Norfund and other lenders in one of the largest debt deals on the continent. The loan, Wave said, will help her expand her customer base and grow operations in Senegal and the Ivory Coast.