A year after concluding an unknown pre-seed round, Qwili, a firm that offers a hybrid sales platform to micro and small merchants in South Africa, has secured $1.2 million in seed funding.
The fund, which included participation from companies including Strat-Tech, Next Chymia, Untapped Global, Codec Ventures, and angel investors like Ashwin Ravichandran and Kanyi Maqubela, was led by the South African venture capital firm E4E Africa.
According to Qwili, the investment would be used for the creation of hardware, new employees (to enhance operations and development capabilities), and the development of apps.
The startup’s hardware consists of the inexpensive NFC-capable Qwili Pula smartphone, which enables retailers to make and receive payments.
The platform’s software transforms these smartphones into point-of-sale devices, enabling merchants to sell value-added services to their customers like data and pay-TV subscriptions, groceries, and clothing.
This software can be downloaded as an app on any smartphone or is installed automatically on Qwili’s phones. According to CEO Luyolo Sijake, Qwili’s smartphones cost between $60 and $70.
Users who are unbanked and digitally exempted are said to be Qwili’s target market. According to a statement from the startup, its mobile app acts as a “digital sales platform” that enables micro and small merchants (agents) to simplify the sale of goods and value-added services.
The startup was initially introduced by Sijake and his co-founders Thandwefika Radebe and Tapfuma Masunzambwa as an alternative concept.
They used a business-to-customer approach where Qwili sold these gadgets to specific consumers, who then made purchases using the platform’s digital wallet.
As users operated the phone and Qwili got a cut of each transaction, the idea was that the phone would ultimately go into business for itself and users could purchase them from Qwili. That apparently didn’t work, which is why the focus shifted to merchants.
Prior the actual shift, Qwili sold over a thousand cellphones to end users. With 500 micro and small merchants using the hybrid platform. of whom roughly half make use of Qwili’s NFC-enabled smartphones, it has also seen growth in its business-to-business model.
A merchant without a physical storefront who sells digital goods to nearby communities and networks on the side is its typical client.
For this group, it makes no financial sense to purchase point-of-sale equipment with restricted operability; instead, a smartphone that allows them to accept payments and advertise things on WhatsApp would do.
Techbuild’s Take
With more well-known companies entering the market to improve technology and provide what customers and businesses want in terms of apps and services that enable people to pay with their phones, mobile payments have been rapidly evolving.
Payment platforms have developed throughout time, making it possible for SMEs to operate more efficiently.
These platforms, like Qwili, have also gained the attention of both foreign and domestic investors, which is enabling them to scale up their operations and provide users with a richer user experience.
In an announcement, the startup claims that its impact is felt in three different ways. First, agents on the platform have access to a different, more versatile source of revenue because they may earn commission on sales that are done via Qwili.
Users of these agents observe considerable reductions in the time, efficiency, and price hurdles standing in their way of receiving the services they require.
Third, connection to a market that was previously offline has been eased by value-added service providers.
According to Qwili, the money enables it to speed up the rate at which it scales back operations to see a greater impact in all three of these sectors.
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