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Hardly 6 months after laying off some 300 people in June 2022, Wave Mobile Money Uganda Limited is set to lay off more people, CEO East Africa Magazine can exclusively reveal.
We have learnt from impeccable sources that despite reassuring the market, that the June 2022 move was to “narrow and sharpen focus” and that the payments company was “here to stay for the long-term and would continue to offer free deposits, withdrawals and charge 1% on transfers” Wave will on Thursday 17th 2022 shave off another significant chunk of staff.
The move will leave the company to a bare minimum.
Wave Mobile Money’s services include cash deposits, withdrawals, money transfers as well as merchant and bill payments. Its major competitors in Uganda are MTN Mobile Money and Airtel Money, which together control over 95% of the market.
“In June, Wave reduced the staff from 500 people to about 180. This week, approximately 155 staff will be laid off, leaving some loose structure of about 25 people,” confirmed a source, that is very familiar with the size-down.
According to the source, the latest move has affected both field teams and senior management.
“The exco has been purged to a bare minimum, leaving about 3 to 4 people. The affected people have been notified and are being given a chance to resign before the final axe is swung on Thursday,” added the source.
The latest move, when it comes to pass could signal either a possible exit from the heavily competitive and nearly duopolistic Ugandan market or a complete rebuilding of the Wave Mobile team and possibly a change of strategy altogether.
According to insiders, the latest staff purging has been dictated by the company’s new investors and financiers.
The Senegal-based FinTech Wave Mobile Money in July 2022 raised USD91.6 million in venture debt financing. The International Finance Corporation (IFC), the private sector financing arm of the World Bank arranged the package, which is comprised of USD25 million from the IFC itself, and B Loans of a combined USD41 million from Symbiotics, Blue Orchard, responsAbility, and Lendable, as well as parallel loans of USD24M from Finnfund and Norfund.
The money, Wave said, would be used to fund working capital needs, including the pre-financing of agents and bill payments.
IFC created the B Loan structure in 1959 to allow private lenders such as banks, investment funds, and other private investors to participate in IFC’s lending operations to emerging market borrowers at the same preferential status as IFC’s own loans. Parallel loans on the other hand, give borrowers access to debt financing from multiple development institutions in a single package.
“It is quite harrowing. Given the amount of work that there is to do, leaving only 25 people is just confusing. There is so much to do and there just won’t be enough hands to do it, unless ofcourse the people they are leaving behind, are to help close the company,” said another industry source that is familiar with Wave’s operations.
The company chose a low-pricing market entry strategy offering free deposits, withdrawals, and charges 1% on transfers in the hope that this would attract customers. The company also invested in pre-financing agents as a way to lure them to join the new provider. But as it is, this has not significantly moved the needle and instead lost Wave more money. The big boys too- MTN Mobile Money and Airtel Money, did not budge either. As it is Wave’s investors are now impatient and do not want to lose more money.
In April this year, Wave published its first financial results since it was licensed by the Bank of Uganda, reporting it had made only UGX311.8 million in revenue and a UGX18.5 billion loss. By comparison, MTN Mobile Money reported UGX338.1 billion in revenue and UGX89.3 billion in profit.