Wave, an African fintech backed by Stripe and valued at $1.7 billion, cut its workforce by 15% in June – TechCrunch

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Wave, an African fintech that offers mobile money services in Senegal and Ivory Coast, laid off around 15% of its workforce last month. TechCrunch first got a feel for layoff news on LinkedIn, where Jessica Chervin, a former Andela executive who joined Wave as head of expansion in March, wrote that she was leaving the company.

“Like many tech companies, Wave is adapting quickly to the jarring changes in capital markets in recent months and, like the best of them (and more importantly, as a financial institution), it has had to make some very hard to ensure it can continue to serve customers in existing markets now and long into the future,” wrote Chervin, who is also an angel investor. “This vital shift in strategic priorities means that I and many more are leaving Wave much sooner than anyone had hoped.”

TechCrunch reached out to Wave for comment on the matter, and a spokesperson confirmed that “nearly 15%” of the company’s roughly 2,000 employees have been laid off. Thus, 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 reducing its teams in these markets as part of efforts to ensure it does not have to depend on new funding at a moment “when investors around the world reduced.

Wave said its decision to pull out of new markets would help it double down on its efforts in Senegal and Ivory Coast, key markets “where we are mobile money market leaders with growing businesses.” , as it continues 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 had a stealth launch two years prior in Senegal, has since raised more than $290 million in equity and debt capital to date. The company, led by Drew Durbin and Lincoln Quirk, was valued at $1.7 billion when it last raised last September after raising $200 million, the largest Series A in Africa. It was led by Stripe, Sequoia Heritage, Founders Fund and Ribbit Capital. Other investors in the startup are Sam Altman and Partech Africa.

Wave’s platform is similar to PayPal (with mobile money accounts, not bank accounts). It runs a network of agents that uses cash in 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 telcos with its app-based solution, cheaper fees and QR-based technology. And despite its ongoing feuds with these incumbents over market share, Wave claims to serve more than 10 million monthly users in its operating markets.

Wave is the first unicorn outside of Senegal and the entire region of French-speaking Africa. However, its staff covers its five markets, Tunisia, Kenya, USA, Germany, Nigeria and UK. The company spokesperson said a small percentage of released employees worked remotely in those countries.

“The people we are parting with are some of the smartest and most dedicated in our industry. Letting them go is one of the hardest decisions we have ever had to make as a company,” reads the rest of the statement. “We regret the impact on employees and their families, but we believe the best way to honor these colleagues is to make their contributions last. Wave is offering enhanced benefits and packages to all affected employees to express our deep appreciation for their valuable contributions, hard work and dedication.

Layoffs have become the norm as rising interest rates and a protracted bull run that has swept private and public markets over the past two years, among other factors, combine to make life difficult for tech companies. Amid recession fears, investors are being strict with their money, mostly towards late-stage and growth startups. As a result, startups have had to cut costs and downsize to survive; those who managed to raise capital had to adjust to pre-pandemic valuations.

Big tech companies laid off (Microsoft) and hinted they would lay off (Meta) employees. Small to large startups in various industries, such as Substack, Hopin, Coinbase, Bolt, Byju, Twitter, PayPal, and Tesla, have also downsized. And while it seemed at first that the ripple effect would take a considerable time to reach Africa, news of the layoffs of mobility startup Swvl and health tech company Vezeeta has made the rounds last month.

However, just as the situation was not dire for Swvl and Vezeeta, it is not for Wave. The Senegal-based startup probably has enough money in the bank for the next few years, and last week it obtained a syndicated loan of 90 million euros from the International Finance Corporation (IFC), Lendable, Norfund and other lenders in one of the biggest debt deals on the continent. The loan, Wave said, will help it grow its customer base and expand its business in Senegal and Ivory Coast.

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