How Wave Attracted Largest Series A Funding for an African FinTech at $200-Million

The Senegal-based mobile money provider Wave has raised $200-million in a round of funding making it the largest-ever Series A funding round for a fintech startup in Africa, shooting the value of the company to around $1.7-billion.

No other startup company in Africa has managed to raise such an amount in a Series A round. OPay, likewise a fintech solution provider, managed to raise $400-million in the continent’s largest-ever venture capital investment during a Series C round. Interswitch follows OPay with its $200-million investment from Visa also during Series C funding.

The latest round by Wave was jointly led by four big-name backers, starting with Sequoia Heritage – an endowment-style fund and a separate entity that operates independently under the Sequoia brand – which was joined by Founders Fund, payment giant Stripe, and closed out by Ribbit Capital.

Others in the round included existing investors Partech Africa and Sam Altman, the former CEO of Y Combinator and current CEO of OpenAI.

 Wave has gone from a spinoff of Africa/Asia-focused cheap remittance company, Sendwave, to a mobile money service provider and one of Africa’s few startup unicorns – startups valued at over $1-billion- in just 4 years.

Now, with this latest investment, Wave is planning to expand its presence in Senegal and Côte d’Ivoire. The startup also intends to grow its 800-person team across product, engineering and businesses, as well as expand into other markets like Uganda and Mali, which the company considers regulatory-friendly.

Wave entered a Senegalese market already full of serious competitors. Orange is the country’s largest mobile operator, enjoying around 50% of the country’s telecom market share with nearly 8-million mobile users, twice as much as second-place telco Free, which has 4.4-million subscribers.

Expresso Telecom, a branch of the UAE’s Expresso Telecom Group, holds about 22% of the market share with over 3-million subscribers. All three firms already provide mobile money services in Senegal through Orange Money, Free Money and E-Money, respectively.

In the past, other third-party fintech firms have had to manage with small market shares while competing against the three incumbents.

However – Wave entered the market with an overall 70% cheaper service. The company, created by Americans Drew Durbin and Lincoln Quirk, offers free deposits and withdrawals via its mobile app and applies a fixed transaction fee of just 1% for money transfers between individuals.

Wave’s entire product is fueled by affordability and unlike its competitors; Wave passes additional fees on bill payments from users on to businesses. For users without smartphones, it provides a free QR-card to transact with agents to open accounts, receive deposits and executive withdrawals.

The company’s “radically affordable” strategy has been paying off and has even managed to make  Orange quake. To match the supremely competitive prices that the startup has offered since 2020, the telecom was forced to lower its prices as well, bringing down bill payment fees to just 1% from June 1 2021.

Orange has also removed the ability for Senegalese users to purchase Orange airtime via Wave’s mobile app, a controversial move that has been called anti-competitive by the fintech startup. Currently, the dispute between Orange and Wave is being handled by Senegal’s telecoms regulator.


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