Wave, an African fintech firm, secures $200M at $1.7B valuation

Wave joins OPay and Flutterwave as this year's freshly minted unicorns in Africa - businesses valued at more than $1 billion — and is the fourth African unicorn after Interswitch.

Main Highlights

Wave, a mobile money service located in the United States and Senegal, has raised $200 million in a Series A round of investment. The investment is the region’s largest Series A transaction to date, valued at $1.7 billion.

Sequoia Heritage, an endowment-style fund and a distinct organization that operates separately under the Sequoia brand; Founders Fund; payments giant Stripe; and Ribbit Capital led the round. Existing investors Partech Africa and Sam Altman, the former CEO of Y Combinator and current CEO of OpenAI, also participated in the round.

Sub-Saharan Africa’s mobile money sector is expanding at a rapid pace. This year, more than $500 billion has passed through the accounts of the region’s 300 million active mobile money users. However, while being one of the largest alternative financial infrastructures recognized internationally, it only accounts for a small portion of the entire industry.

Wave Founders

From Sendwave to Wave

Sendwave was created in 2014 by Drew Durbin and Lincoln Quirk to provide low- or no-fee remittances from North America and Europe to selected African and Asian nations. When WorldRemit paid up to $500 million in cash and equity for Sendwave last year, the YC-backed firm became a subsidiary. The product was tested as Wave in Senegal in 2018, although it was still part of the Sendwave ecosystem. Durbin and his colleagues shifted their emphasis to Wave when WorldRemit bought Sendwave.

Unlike M-Pesa, the mobile payment service pioneered by Safaricom, and other offerings from telecom carriers such as Orange and Tigo, Durbin claim that Wave is developing a “radically affordable” mobile money solution. The Dakar-based technology functions similarly to PayPal, with an agent network that uses cash on hand to support Wave users. According to the firm, customers may make free deposits and withdrawals and pay a 1% fee when sending money.

Durbin claims that this is 70% cheaper than telecom-led mobile money and that if there is a transfer difficulty, reimbursements are given quickly, unlike with incumbents, where customers may have to wait several days. Wave is only available as an app. Wave also gives a free QR-card to those who do not have a smartphone in order to deal with an agent.

Wave has been able to drive its development to several million monthly active users and billions of dollars in yearly volume by creating its own full-stack infrastructure — agent network, agent and consumer applications, QR cards, company collections, and disbursements.

The two-year-old firm claims to be Senegal’s largest mobile money player, with more than half of the country’s citizens being active users. The number of subscribers is estimated to be between 4 million and 5 million, and Wave hopes to duplicate similar development in Ivory Coast, the company’s second official expansion country last year.

Wave will expand its footprint in Senegal and Ivory Coast as a result of this funding, as well as expand its existing 800-strong staff across product, engineering, and business. Wave will also grow into other areas that it believes are regulatory-friendly, such as Uganda.

A unicorn after two rounds

While other sources claim Wave has already raised $13.8 million, Durbin declined to comment on the number. He did, however, indicate that Partech, a French firm with an African fund, participated in a seed round with other investors such as Founders Fund and Stripe.

Tidjane Deme, the general partner at Partech, said the investment would help Wave improve its service in an industry that has traditionally lacked innovation. “We have backed Wave since 2018 because we are confident that mobile money is still an unresolved problem in Africa,” he added in a statement. Wave has a fantastic product design, outstanding execution, and a solid financial outlook. They are honored to watch it become Senegal’s first unicorn.

Meanwhile, the Wave investment comes from Sequoia Heritage, an endowment-style firm that is making its first investment in an Africa-focused business. Wave joins OPay and Flutterwave as this year’s freshly minted unicorns in Africa – businesses valued at more than $1 billion — and is the fourth African unicorn after Interswitch. Other billion-dollar firms include Jumia, which is publicly listed, and Fawry, an Egyptian fintech.

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