KAMPALA, Uganda — Wave Transfer Limited’s ambitious foray into Uganda’s mobile money market appears to be faltering, as the fintech firm reported a significantly wider net loss for the year ending Dec. 31, 2024. Financial statements released Tuesday show the company’s losses ballooning to 14.33 billion Ugandan shillings (approximately $3.78 million USD), a sharp increase from the 11.18 billion shillings lost in the previous year.
Despite generating a substantial 14.68 billion shillings in revenue, Wave Transfer’s expenses surged, outpacing income and pushing the company deeper into the red. The operating loss also widened to 3.11 billion shillings, according to the summary financial report.
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The directors acknowledged the disappointing financial outcome in their statement, noting that the summary statements received an unmodified opinion from auditors BDO East Africa. However, the escalating losses cast doubt on the long-term viability of Wave’s strategy in a competitive market dominated by established players.
Wave, a Senegal-based startup that garnered a $1.7 billion valuation in 2021, entered Uganda with a disruptive low-fee model, offering free deposits and withdrawals and a 1% transfer fee. This aggressive pricing aimed to undercut established mobile money giants like MTN and Airtel. However, the deepening losses suggest this strategy has not translated into sustainable profitability in the Ugandan market.
The financial woes follow earlier indications of trouble for Wave in Uganda. In late 2022, reports surfaced of a second round of staff layoffs, signaling a potential retrenchment or strategic shift. This came after a global workforce reduction that also impacted its Ugandan operations, as the company sought to conserve capital and refocus on its core markets in Francophone Africa.
The Ugandan mobile money landscape, while experiencing significant growth, presents a formidable challenge for newcomers. Established players boast extensive infrastructure, strong brand loyalty, and deep market penetration, factors that Wave has apparently struggled to overcome despite its initial low-cost appeal.
The widening losses suggest that Wave’s dream of capturing a significant share of the Ugandan mobile money market is turning sour. The full audited financial statements will likely provide further insight into the specific challenges the company faces and the strategies it may consider to stem the financial bleeding and carve out a sustainable future in this tough East African market.
