Wave is Africa’s only startup on Y-Combinator’s list of top earners

For the second year running, Francophone fintech Wave is the only African company listed on Y-Combinator’s top 50 earning startups in 2024. The global accelerator has 92 African startups in its portfolio.

YC, which previously ranked its startups by valuation, stopped sharing company valuations in 2023 after many tech giants saw significant haircuts in their valuations. Startups and VCs have begun emphasising revenue, unit economics and profitability over hefty private market valuations.

“Revenue is the clearest indicator of a startup’s success,” reads an excerpt from Garry Tan’s blog post, Y-Combinator’s CEO. In 2022, Wave was the second most valuable African company in YC’s portfolio after Flutterwave.

This year’s list is sorted alphabetically because startup revenue is often confidential and includes AirBnB, Deel, Doordash and Stripe.

Wave launched its mobile money product in Senegal in 2018 as a challenger to telcos like Orange and Free Senegal, which control 77% of the telco market combined.

At the time, the telcos charged between 5%-10% per transaction. Wave’s market entry saw it reduce these prices by as much as 70% and offer free deposits and withdrawals via its mobile application. It also introduced a fixed transaction fee of just 1% for money transfers between individuals. Its competitors followed suit and dropped prices by as much as 80%, even limiting their customers from purchasing airtime via Wave’s mobile app as they sought to challenge Wave’s dominance.

In 2023, it claimed to have 6 million users—roughly 75% of the adult population—in Senegal and 10 million users across Senegal, Côte d’Ivoire, Burkina Faso, Mali, Uganda and Gambia. It recorded 12 billion transactions in Senegal alone in 2022.

Wave’s consistently high revenue makes it stand out in Africa’s fintech ecosystem after three fintechs shut down in 2023 due to dried-up funds. While Wave is still at least two funding rounds from an IPO (startups typically IPO after a Series C, and Wave has only raised a Series A round), there are hopes that it can list on a global exchange in the coming years as private investors can already buy shares in the company.

In 2022, to increase profitability amidst the global economic downturn, Wave laid off 300 employees—a 15% reduction of its 2,000 employees. It now has 850 employees. The startup, backed by IFC, Stripe and Sequoia, also had to reverse its expansion plans that same year.

“The company is still growing rapidly but we have to slow down the pace of entry into new markets to ensure we’re focused on serving the 10 millions+ active users in existing markets,” Sid Sridhar, the company’s global head of business, told TechCabal.

Wave has raised over $300 million and is one of Africa’s unicorns—private companies worth over $1 billion. The startup was founded by Drew Durbin and Lincoln Quirk after they exited for $500 million for Sendwave, their first startup.