Wave, an African fintech company that offers mobile money services in Senegal and Ivory Coast, laid off about 15% of its workforce last month. TechCrunch first learned of the layoffs on LinkedIn, where Jessica Cherwin, a former Andela executive who joined Wave as expansion head in March, wrote that she is leaving the company.
“Like many tech companies, Wave has been adjusting quickly to the drastic changes in the capital markets in recent months, and like the best of them (and importantly, as a financial institution), it has had to take very drastic measures to ensure that it can continue to serve clients in existing markets now and 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.”
TechCrunch reached out to Wave for comment on the matter, and a spokesperson confirmed that “about 15%” of the company’s nearly 2,000 employees have been laid off. Thus, the layoffs affected almost 300 employees, most of whom worked in new markets for Wave: Burkina Faso, Mali and Uganda. In a statement issued by Wave to its employees on June 30, the company said it is reducing the number of its teams in these markets as part of an effort to ensure it does not have to depend on new funding at a time “when investors around the world are cutting back.” .
Wave said its decision to exit new markets will help it double its position in Senegal and Ivory Coast, core markets “where we are leaders in the mobile money market with growing business” as it continues to serve its new markets.
In 2020, Wave officially spun off from Sendwave, a money transfer platform that WorldRemit acquired for approximately $500 million in cash and stock. The company, which had a sneaky launch in Senegal two years earlier, has since raised more than $290 million in equity and debt. The firm, run by Drew Durbin and Lincoln Quirk, was is valued at $1.7 billion at its last fundraiser last September after raising $200 million., the largest Serie A in Africa. It was led by Stripe, Sequoia Heritage, Founders Fund and Ribbit Capital. Other startup investors include Sam Altman and Partech Africa.
The Wave platform is similar to PayPal (with mobile cash accounts rather than bank accounts). It operates an agent network that uses cash to serve customers who can deposit and withdraw for free and receive a 1% commission every time they send money.
The company is disrupting the mobile money industry dominated by banks and telcos with its app-based solution, cheaper fees, and QR-based technology. And despite ongoing squabbling with incumbents over their market share grabs, Wave claims to serve more than 10 million monthly users across its operating markets.
Wave is the first unicorn from Senegal and the entire French-speaking region of Africa. However, its employees operate in five markets: Tunisia, Kenya, USA, Germany, Nigeria and the UK. A company spokesperson said a small percentage of the laid-off employees were working remotely in those countries.
“The people we part ways with are some of the smartest and most dedicated people in our industry. Letting them go is one of the most difficult decisions we have ever had to make,” the rest of the statement reads. “We regret the consequences for employees and their families, but we firmly believe that the best way to honor the memory of these colleagues is to preserve their contributions. Wave is offering enhanced benefits and packages to all affected employees as a way of expressing our deep appreciation for their valuable contributions, hard work and dedication.”
Layoffs have become the norm as rising interest rates and the continued bull run that has gripped the private and public markets over the past couple of years, among other factors, have combined to make life difficult for tech companies. Amid recession fears, investors are being strict with their money, mostly on growth and late-stage startups. As a result, startups have had to cut costs and reduce their workforce in order to survive; those with some success in raising capital have had to adjust to pre-pandemic estimates.
Major tech companies laid offMicrosoft) and hinted at shooting (Meta) employees. From small to large startups in various sectors around the world such as substack, jump in, Coinbase, Bolt, Biyu, Twitter, PayPalas well as Teslaalso reduced. And while at first it looked like the domino effect would take a significant amount of time before it reached Africa, news of layoffs from a mobile startup Swvl and Healthtech Vezita did the rounds last month.
However, for Swvl and Vezeeta the situation was not dire, and for Wave. The Senegalese startup probably has enough money in the bank for the next few years, and last week it received a syndicated loan of €90 million. from the International Finance Corporation (IFC), Lendable, Norfund and other lenders in one of the largest debt deals on the continent. The loan will help grow its customer base and expand operations in Senegal and the Ivory Coast, Wave said.
Credit: techcrunch.com /