Wave, a Stripe-backed African fintech valued at $ 1.7 billion, cut 15% of employees in June – TechCrunch
Wave, an African fintech offering mobile money services in Senegal and Ivory Coast, laid off around 15% of its workforce last month. TechCrunch first got a whiff of the layoff news on LinkedIn, where Jessica Chervin, a former Andela leader who joined Wave as an expansion leader in March, wrote that she was leaving the company.
“Like many technology companies, Wave is rapidly adapting to the shocking changes in the capital markets in recent months, and as the best of them (and more importantly, as a financial institution), it has had to call hard to ensure that it can continue to serve customers in existing markets now and well into the future, “wrote Chervin, who is also an angel investor.” This important shift in strategic priorities means that I and many others are leaving Wave much earlier than anyone had hoped. “
TechCrunch contacted Wave for comment on the matter, and a spokesman confirmed that “close to 15%” of the company’s nearly 2,000 employees were released. As a result, the redundancies affected almost 300 employees, most of whom worked in Wave’s new markets: Burkina Faso, Mali and Uganda.
According to a statement Wave issued to its employees on June 30, the company said it is downsizing its teams in these markets as part of its efforts to ensure it does not have to rely on new funding at some point “when investors around the world is cutting back. “
Wave said the decision to withdraw from newer markets would help it double down on Senegal and Ivory Coast, core markets “where we are market leaders in mobile money with growing businesses”, as it continues to serve its new markets.
In 2020, Wave was officially separated from Sendwave, a remittance platform that WorldRemit bought for around $ 500 million in cash and shares. The company, which launched a stealth launch two years earlier in Senegal, has since raised over $ 290 million in equity and debt to date. The company, run by Drew Durbin and Lincoln Quirk, was valued at $ 1.7 billion at its last fundraiser in September last year 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 related to PayPal (with mobile money accounts, not bank accounts). It operates an affiliate network that uses cash on hand to serve customers who can make free deposits and withdrawals and be charged a 1% fee each time they send money.
The company is disrupting the mobile money industry dominated by banks and telecommunications companies with its app-based solution, cheaper fees and QR-based technology. And despite the ongoing quarrel with these established ones over eating into their market share, Wave claims to serve over 10 million users monthly across its operating markets.
Wave is the first unicorn out of Senegal and the general Francophone Africa region. However, employees cross the five markets, Tunisia, Kenya, the United States, Germany, Nigeria and the United Kingdom. The company’s spokesperson said that a small percentage of the released employees operated remotely across these countries.
“The people we part ways with are some of the smartest and most dedicated in our industry. Letting go of them is one of the most difficult decisions we have ever had to make as a business, the rest of the statement said. “We apologize for the impact on employees and their families, but we strongly believe that the best way to honor these colleagues is to ensure that their contributions last. Wave offers enhanced benefits and packages to all affected employees to express our deep gratitude for their valuable contribution, hard work and commitment. “
Layoffs have become the norm as rising interest rates and an expanded bull run sweeping private and public markets over the past few years, among other factors, combine to make life difficult for technology companies. In the midst of recession fears, investors are strict with their money, mainly towards start-up growth and late stage. As a result, startups have had to cut costs and cut the workforce to survive; those who have had some success in raising capital have had to adapt to pre-pandemic valuations.
Big Tech companies have fired (Microsoft) and suggested firing (Meta) employees. Small to large startups in various sectors, such as Substack, Hopin, Coinbase, Bolt, Byju, Twitter, PayPal and Tesla, have also reduced their size. And although at first it seemed that the bracing effect would take a long time before it reached Africa, the news of layoffs from the mobility start-up Swvl and the health technology company Vezeeta came last month.
But just as the situation was not serious for Swvl and Vezeeta, it is not for Wave. The Senegal-based start-up is likely to have enough money in the bank for the next few years, and last week secured a € 90 million syndicated loan from International Finance Corporation (IFC), Lendable, Norfund and other lenders in one of the largest debt agreements on the continent. The loan, Wave said, will help increase the customer base and expand operations in Senegal and Ivory Coast.
