Wave Is Laying Off Workers As The African Unicorn Tightens Belt [Updated]

Wave, the Senegal-born fintech startup that has made major strides as a disruptor in the mobile money segment, is understood to have triggered job cuts that have affected “many” employees, per a farewell message shared by an outgoing Wave executive on LinkedIn.

The official explanation for the decision, as well as the number of employees and the range of operational divisions affected by the layoff, were unclear initially as Wave did not respond to a WeeTracker request for clarification on the matter. However, a TechCrunch report says 15 percent of Wave’s workforce has been cut off, possibly affecting around 300 employees, especially in its new markets: Mali, Uganda, and Burkina Faso.

According to the post by Jessica Chervin who revealed her time as Expansion Lead at Wave would come to an end at the end of July, Wave is making the “hard call” due to the downturn in the financial markets.

The startup appears to be scaling back on new markets to reduce spending while doubling down in Senegal and Cote d’Ivoire, which are markets where its business has established a leading position.

“Wave is adjusting rapidly to the jarring changes in capital markets in recent months and like the best of them (and importantly, as a financial institution), it has had to make very hard calls in order to ensure that it can continue to serve customers in existing markets now and long into the future,” she shared.

“This vital shift in strategic priorities means that I and many others are leaving Wave far earlier than anyone had hoped.”

Information gleaned from the LinkedIn account of Wave shows the startup has over 2,000 people under employment. This would make it one of the biggest employers of labour in the African tech scene.

Wave has been on an expansion drive as of late, completing a particularly momentous launch in Uganda and the acquisition of a symbolic license that was hitherto unavailable to fintechs in the Francophone region in Africa.

Expansion and pursuit of growth have demanded resources that have come at a cost. But it appears the startup has resolved to tighten its belt to a degree with the reduction of its headcount, perhaps among other things. Interestingly, Wave continues to be hiring for some roles, and reports from days ago have it that Wave raised a further ~USD 90 M from the International Finance Corporation and other investors.

It may have seemed a bit out of left field when Wave appeared to emerge from stealth last September clutching a USD 200 M war chest that is the largest-ever series A in African tech, which valued the company at USD 1.7 B and made it Francophone Africa’s first tech unicorn. However, the startup has long held its own in many unseen battles that may well lead to a whole new tussle beyond mobile money.

Co-founded by the American duo, Drew Durbin and Lincoln Quirk (both of whom also co-founded Sendwave which was acquired by WorldRemit in 2020), Wave has emerged as the leading and perhaps the most viable mobile money challenger in a market segment that is largely under the firm grip established, seemingly unmovable corporates – mostly telcos and banks.

In its earliest market, Senegal, for instance, Wave appears to have usurped the incumbents and become the leading mobile money platform, eclipsing its fiercest rivals in the form of telco-led mobile money services like Orange Money, Free Money, and Expresso Senegal.

Wave Mobile Money functions like PayPal in peer-to-peer payments (but Wave works with mobile money accounts, not bank accounts). Customers visit physical agent spots to make deposits and withdrawals without a fee or use a smartphone app with a 1 percent charge on any amount of money being sent.

Its unique proposition of free deposits/withdrawals with a flat fee of 1 percent on transfers – which is a radical shift from the traditionally expensive telco model – has pushed it to the top of the mobile money totem pole in Senegal.

Wave also differentiates itself from the incumbents in that it does not rely on the USSD path popularised by telco-led mobile money services. Rather, Wave’s audacious mobile money product is largely app-based; a departure from what older, telco-led platforms primarily push. For users without a smartphone or internet, Wave also provides a free QR card to transact with an agent.

The unfolding tech slowdown has reverberated across the globe, with big firms and small startups making some tough calls to ride out the storm. Companies are adjusting their fundraising strategy and spending in light of the funding decline. Several thousands of tech workers have been laid off across the globe.

African tech hasn’t seen that sort of upheaval, but the recent job cuts at Wave adds to two other publicised cases at mobility-tech Swvl and healthtech Vezeeta (both of which coincidentally kicked off in Egypt but are now based in Dubai), where staff cuts or some other kind of downturn-induced adjustment has been reported so far.

UPDATE: This article was updated at 11:23 WAT on July 14 with some new information on the extent of the layoff and the rationale behind the decision.