Wave, a US- and Senegal-based mobile money provider for sub-Saharan Africa, announced raising a $200 million Series A co-led by Sequoia Heritage, Founders Fund, Stripe and Ribbit Capital, according to TechCrunch.
The company says it will use the funding to expand its services in Senegal and the Ivory Coast, grow its product, engineering and business teams, and move into other markets it feels is regulatory-friendly.
“I think there’s a pretty broad array of countries that have strong central banks and clear regulations are open to new players, or even want new players to come in and try to compete with the telcos. And so we have a lot of licenses that are in progress, and we’ll try to prioritize the countries where we’re able to get started sooner over the ones that it takes longer,” Wave CEO Drew Durbin told TechCrunch.
The list of countries receptive to mobile money providers is growing, with $500 billion moving through sub-Saharan African accounts last year across 300 million active mobile account users. The potential for mobile money is large in these areas as well, with only 43% of adults in the region using traditional bank or mobile money accounts in 2017.
As telecom operators attempt to take over the other 50% through their existing platforms, Wave is working to disrupt the landscape through its mobile-only, app-based approach. The company’s services do not require a bank account and instead run through a network of small local business agents who use on-hand cash to service Wave users, according to FinExtra.
Founded in 2018 by Durbin and Lincoln Quirk as Sendwave, the company’s success and resulting $1.7 billion valuation has largely come from its ability to build its own infrastructure stack and utilize a regulatory-first approach in expanding across Africa.
This allows Wave to provider cheaper services than existing telecom-led mobile money solutions, and meet legislative hurdles that often delay expansion efforts for companies attempting to disrupt telecommunication operators in the region.
“We saw an opportunity to make a bigger impact by trying to build a better, much more affordable mobile money service than the telcos are building throughout much of sub-Saharan Africa. We didn’t see any companies besides the telcos trying to solve that problem,” Durbin told TechCrunch.
Through its infrastructure building, which includes a full-stack network of agents, consumer applications, QR cards, business collections and disbursements, Wave is currently processing billions of dollars across millions of active users, with expansion in Côte d’Ivoire and Uganda expected soon.
In other recent fintech news, SurePay raised €12.2 million in funding led by Connected Capital with the goal of scaling its Confirmation of Payee services. Premium debit card company Point also raised a $46.5 million Series B led by Peter Thiel’s Valar Ventures.