South African startup Quilly gets $1.2 million to scale its apps and low-cost NFC-enabled smartphones Meczyki.Net

quillieA startup that provides hybrid sales products to micro and small merchants in South Africa has raised $1.2 million in seed funding, a year after closing an undisclosed pre-seed round.

E4E Africa, a South African venture capital firm, led the round, which welcomed the participation of other firms such as Strat-Tech, Next Chimia, Untapped Global and Kodak Ventures, and angels such as Ashwin Ravichandran and Kanye Maqbela.

In a statement shared with Meczyki.Net, Quigley said it will use the investment for app development, new hires (improving operations and development capabilities) and hardware production.

The company’s hardware is a low-cost NFC-enabled smartphone called the Quilly Pula that allows merchants to send and receive payments. The platform’s software (which can be downloaded as an app on any smartphone or installed automatically on Qwili’s phone) turns these smartphones into point-of-sale devices, allowing merchants to access data. and pay-TV subscriptions, allowing to sell value-added services like groceries. clothes to your customers. CEO Luyolo Cizake told Meczyki.Net over a call that Quillie’s phone costs between $60 and $70.

Qwili says its target audience is digitally excluded and unbanked customers. The company said in a statement that its mobile app acts as a “digital sales portal” through which micro and small merchants (agents) can facilitate the sale of goods and value-added services.

At first, Sizake and his co-founders Thandawefika Radebe and Tapafuma Masunzambawa launched Quilly as a different idea. They employed a business-to-customer model where Quillie sold these devices to individual users, who used the platform’s digital wallet to purchase value-added services. The plan was that users operate the phone and Quillie took a piece of each transaction, the phone would eventually commercialize itself, and users could buy them from Quillie. It turns out that didn’t work, so pivot to traders.

“During those early stages, the phone wasn’t paying off quickly enough, and there wasn’t enough adoption of digital services. But what happened was that people sold pay TV, electricity, and other value-added services to the people around them. “They started using the phone in a way that we didn’t intend, made more commercial sense. That’s how we ended up with this agent model: Essentially people use devices and software to sell services to others rather than buy services for themselves.”

image credit: quillie

Qwili sold over a thousand smartphones to end users before pivoting. Its business-to-business model has also picked up steam, as 500 micro and small merchants use the hybrid platform (nearly half use Quilly’s NFC-enabled smartphone). Its typical business customer is a vendor without a storefront who sells digital products informally to immediate communities and networks. Purchasing a point-of-sale device with limited functionality does not make economic sense for this category; In contrast, a smartphone where they can collect payments and advertise products on WhatsApp.

Sizake said that selling the smartphone to Qwili doesn’t make any sense, as it’s only able for the company to influence merchants who use the platform for business purposes. It charges a commission on every sale made on its application. “We are all about enabling those who are currently digitally excluded, to participate in the variety of value that has to be included digitally,” he said. “So the real hurdle for that has been the hardware: a reliable quality smartphone is very expensive, which means access to mobile internet is very expensive. So we expect to continue to provide smartphones at a lower cost.”

Its impact is felt in three areas: First, agents on the platform have access to an alternative, flexible source of income, which they earn on sales made through Quiely, Quilli said in a statement. Second, the clients of these agents see time, efficiency and financial barriers between themselves and the services they require significantly less. And third, providers of value-added services have facilitated access to the offline market in the past. Qwili says the funding allows it to increase the speed at which it scales its operations to see its impact in all three of these areas.

According to Sizake, Qwili currently processes $75,000 monthly GMV from its 500 merchants. However, the South African platform – which saw strong business growth of more than 300% from Q1 to Q2 of 2022 – plans to grow those numbers from 3,000 merchants to $1 million by the end of the year after expanding into neighboring Botswana.

“We believe that Qwili is both highly scalable and high impact. Qwili agents love the entrepreneurial opportunities that Qwili offers them, while giving their community access to e-commerce and reasonably priced goods and services,” Bastian Hochstenbach, Co-Founder and Managing Partner, E4E Africa, on the investment, says: “Quilly’s founding team is exceptional, and the business model is one to support diverse founders in creating a thriving, innovative and inclusive Africa with the aspiration of E4E Africa. Strong fit.”