Qwili, a startup based in South Africa, has successfully raised $1.2 million in seed funding to improve its business operations.
E4E Africa, a venture capital firm based in South Africa, took the lead during this funding round. Angel investors such as Ashwin Ravichandran and Kanyi Maqubela are also involved in the project. Other participants include Strat-Tech, Next Chymia, Untapped Global, Codec Ventures, and others.
Qwili was launched by Luyolo Sijake (CEO), Thandwefika Radebe, and Tapfuma Masunzambwa in 2019. In addition to this, it provides a hybrid sales product to micro and small merchants in South Africa.
The Qwili Pula is a low-cost smartphone with Near Field Communication (NFC) capabilities that was developed by the Qwili startup. This smartphone gives merchants the ability to send and receive payments.
Its software can be downloaded as an application (app) for use on any smartphone, or it can be pre-installed on Qwili phones, the cost of which ranges from sixty to seventy dollars.
These smartphones are then converted into Point of Sale (PoS) devices, which enables retailers to sell value-added services to their customers such as data and pay TV subscriptions, as well as groceries and clothing.
It deducts a percentage from the proceeds of every sale made through its app. In addition, the customers who make up its target demographic are those who do not have access to the internet or a bank account.
The mobile application developed by Qwili is referred to as a "digital sales portal" by the company. This portal gives micro and small merchants (agents) the ability to sell products and value-added services. Additionally, customers who are digitally excluded and do not have bank accounts are the target audience for this app.
Its typical user is a vendor who does not operate a brick-and-mortar retail location and instead conducts business informally with local communities and networks to sell digital goods.
Previously, the company used a business-to-customer model, in which Qwili sold these devices directly to individual users, who then used the platform's digital wallet to pay for value-added services.
However, this business model was unsuccessful due to the fact that the phone did not pay for itself in a timely manner and digital services were not adopted as rapidly as anticipated.
However, the company found that customers were selling the hardware and software to third parties rather than purchasing the company's services for their own use. Because of this, Qwili shifted its business model from being a B2C model to a B2B model.
The company claims that there are currently 500 micro and small merchants making use of the platform. At the moment, it has a gross merchandise volume of $75,000 per month that it processes ( GMV).
In addition to this, it claims a revenue increase of 300 percent from the first quarter to the second quarter of 2022. Following the completion of its expansion into the neighboring country of Botswana, the company intends to increase those numbers to one million dollars from three thousand merchants by the end of the year.
Qwili stated that it would put the investment money toward the development of its app, the hiring of new employees to improve its operations and develop capabilities, and the production of its hardware.