UD Round-Up #04: The Word From The Streets

Is The Best Go To Market Execution By An African Tech Company?

I'm just coming back from a research trip (holiday) to Dakar. In Dakar, you're never more than 1km away from the ocean, a cat, and a Wave mobile money agent. For a company so widely used and one that just raised a $200M Series A at a $1.7B valuation, it’s surprising how many people had never heard of them.

Wave was a spinout from Sendwave, which was acquired by Worldremit for $500M. Prior to the acquisition, I had never heard of them and I consider myself a pretty keen observer of the African technology ecosystem. Apparently, I wasn't the only one. According to PitchBook, only *one* African VC firm has invested in Sendwave/Wave. A Senegal based friend explained it to me like this:

These guys had piloted a bunch of ideas across Africa before coming to Senegal. They went outside of Dakar and rented a house to stay in with their core team in [a rural area] and quietly built Sendwave. They focused on customers outside of Dakar and were pretty under the radar. The only local VC that invested in Sendwave discovered them while doing due diligence for another company.

While scaling Sendwave, which was a remittances product, they realised that the user experience for local transfers could also be improved with the same product and distribution infrastructure they built for remittances. They began piloting the product that became Wave and ultimately spun it off after Sendwave was acquired.

Wave is the best example of what Wiza Jalakasi described as Mobile Money 2.0.

The first generation of mobile money companies was built by telcos for feature phones and on top of GSM infrastructure. Mobile Money 2.0 will be built by venture-backed companies for smartphones and on top of the internet.

In a telegram group that I’m a part of, there was a really insightful conversation by Moulaye Taboure and Bartel Latzoo on Wave which I’ve replicated here with light editing:

Wari’s (incumbent mobile money 1.0 operator) model and profits got destroyed by Wave over the last year. Wari was always the profitable (so more costly) alternative to Orange Money (another incumbent mobile money 1.0 operator), but in one year Wave exceeded both of them due to a great product, low fees, and aggressive marketing.

Orange Money and Wari have really poor