KAMPALA, Uganda — Wave Mobile Money, the Senegal-based fintech that entered Uganda with a disruptive low-cost model, is finding the local market increasingly challenging, as evidenced by its significantly widening net loss for the year ending December 31, 2024. The company’s financial statements, released Tuesday, reveal a substantial increase in losses to 14.33 billion Ugandan shillings (approximately $3.78 million USD), a stark contrast to the 11.18 billion shillings loss reported in the previous year.

Despite generating a notable 14.68 billion shillings in revenue, Wave Mobile Money’s operational expenses and cost of sales surged, outpacing income and pushing the company deeper into negative territory. This resulted in a larger operating loss of 3.11 billion shillings, ultimately contributing to the expanded net loss.

The directors acknowledged the difficult financial climate in their statement accompanying the summary report, noting the unmodified audit opinion from BDO East Africa. However, the escalating losses underscore the intense competition and unique dynamics of the Ugandan mobile money landscape, which appears to be posing significant hurdles for Wave’s ambitious expansion.

This latest financial setback follows earlier indicators of potential instability for the venture-backed fintech in Uganda. Reports from late 2022 suggested a second round of staff layoffs, fueling speculation about a possible strategic retreat or operational scale-down. This followed a prior global restructuring in June 2022, which impacted its Ugandan workforce, as the company sought to conserve capital and prioritize its more established markets in Francophone Africa.

Wave’s strategy in Uganda centered on attracting users with free deposit and withdrawal services and a low 1% transfer fee, a stark departure from the higher charges levied by dominant players like MTN and Airtel. While this approach may have garnered some market share, the widening losses suggest it has not been sustainable in the face of established brand loyalty, extensive agent networks, and the deep market penetration of existing platforms.

The Ugandan mobile money market, despite its significant growth and adoption rates, presents a formidable barrier to entry for new players attempting to unseat well-resourced incumbents. The expanded losses for Wave Mobile Money highlight the complexities of navigating this environment, suggesting that its initial disruptive pricing model alone may not be sufficient to achieve profitability and long-term success.