It’s exciting news for francophone Africa as Wave, a Senegal-based mobile money company, becomes its first unicorn. Wave is now valued at $1.7 billion, after it raised $200 million in a Series A funding round; the largest Series A funding round ever for the region.
Wave’s latest investment had backing from venture company giants namely, Sequoia Heritage, Founders Fund, Ribbit Capital, and payments giant Stripe. Other participants in the round were existing investors Partech Africa and Sam Altman; the former President of Y Combinator and current CEO of OpenAI.
The mobile money market in sub-Saharan Africa is growing rapidly as mobile money continues to provide essential financial services to unbanked and underbanked people. Even as widespread as conventional banking is, the number of unbanked and underbanked people is still outrageous. According to the International Monetary Fund, as of 2017, only 43 percent of adults in sub-Saharan Africa were “banked” by way of a traditional bank or mobile money account. As an alternative to traditional banking, mobile money is set out to possess more market share faster than traditional banking in the region, and investors, especially foreign one, recognizing the great potential, have tapped into the sector. Remarkably, up to $500 billion has moved through the accounts of 300 million active mobile money users in the region. This, however, is only a fragment of the entire market.
In 2014, Drew Durbin and Lincoln Quirk founded Sendwave- a company that offers little or no fee remittances from North America and Europe to numerous countries across Africa and Asia, “for anything from family emergencies to buying a friend a beer.” After its launch, Drew Durbin and his team began working on a mobile money product described as having no account fees and “instantly available and accepted everywhere,” and was piloted as Wave in Senegal in 2018.
Last year Sendwave became a WorldRemit subsidiary when the global fintech paid up to $500 million in cash and stock for Sendwave. After the deal, Durbin and his team turned their attention to Wave. According to Drew Durbin, unlike M-Pesa, the mobile payment provider led by Safaricom, and other products of telecom operators like Orange and Tigo, Wave is building a mobile money service that is much more affordable.
Wave, like PayPal, runs an agent network that uses their cash on hand to service Wave users. According to the company, users can make free deposits and withdrawals and charge a 1 percent fee whenever they send money. This, according to Drew Durbin, is 70 cheaper than telecom-led mobile money and whenever there is a transfer problem, refunds are made instantly, unlike with incumbents where users might need to wait for some days.
Wave’s technology is also different from that of telecom-led mobile money. While the latter mostly focused on USSD (although there are provisions to use applications), Wave is solely app-based. For Wave users who do not have a smartphone, there is the provision of a free QR-card to transact with an agent.
Wave claims to be the largest mobile money player in Senegal and that over half of the country’s adults are active users- an estimate of 5 million. In just two years, Wave has built its own infrastructure full-stack — agent network, agent and consumer applications, QR cards, business collections, and disbursements, which it has used to fuel its growth to billions of dollars in annual volume.
With the new funds, Wave plans to strengthen its presence in Senegal. It also plans to replicate growth in Ivory Coast, the second market it officially expanded to last year.