​Sequoia Heritage, Stripe and others invest $200M in African fintech Wave at $1.7B valuation

I’m sure you’ve all seen by now that Senegal actually has its first official unicorn. With Sequoia Heritage and Stripe led $200 million round in Wave, it is becoming more clear that startups across the continent of Africa, not just in Kenya, Nigeria, South Africa and Egypt, can reach these high levels.

In this case, the company is clearly disrupting the incumbent. Wave’s ability to offer commissions as low as 1% has left users disgruntled over the years of paying higher fees, often reaching 9-10% per transaction.

Orange Sonatel, which is present in Senegal, Mali, Guinea Bissau, Guinea Conakry and Sierra Leone, with 26 million subscribers, has a $2.4 billion market cap on the regional BRVM stock exchange. With larger shares of income for telecoms coming from mobile money, Wave represents a significant threat to Orange, which has been forced to drop its fees and has attempted to block access to its mobile network. This potentially helps to explain the high valuation for Wave.

In other parts of Africa, telecoms, where mobile money plays a substantial role in profitability, are also valued highly. Safaricom, which operates the largest mobile money operation across primarily Kenya and Tanzania is worth $15 billion on the Nairobi stock exchange, with 31% of revenues from it’s mobile money unit M-Pesa. This year, TPG invested $200 million in Airtel Africa’s mobile money unit, which features 21 million users across 14 countries in Africa, valuing it at $2.3 billion. MTN’s mobile money’s valuation, across 46 million users transacting $152 billion per year has been estimated at $9.5 billion,

Mobile money, the elder sibling of what we now call fintech, is a colossus in Africa. The GSM Association reports that in 2020 Africa had 560 million mobile money subscribers transacting $490 billion in volume or $1.6 billion per day. This is real mass market adoption of technology, and it helps to explain huge valuations for companies operating in what some consider to be smaller markets in Africa.

Wuri Ventures is headquartered in Dakar, Senegal, and while we focus on investments across the continent, we pay close attention to our backyard. Congrats to the Wave team for making a real dent in this industry and for helping to put Senegal on the map!

As of the writing of this email, we just learned about another newly minted unicorn, Andela, which has been a front runner in African tech for some time! At this rate, we’re getting a unicorn per month. Hopefully this will help to change risk perception of investing in African startups!

To participate in more deals like this, we are currently accepting accredited investors into our fund. This will give our community the opportunity to participate in the technology revolution that is occurring in Africa now. Please reach out to us if you’re interested in learning more!

~ Tijan

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