SA-based startup, Qwili, raises $1.2 million in a funding round led by E4E Africa

Qwili, a South Africa based startup, announced that it has raised $1.2 million in a pre-seed funding round led by a South African venture capital firm named E4E Africa.

Other participants in the funding round include Strat-Tech, Next Chymia, Untapped Global and Codec Ventures and angels like Ashwin Ravichandran and Kanyi Maqubela

Founded in 2019 by CEO, co-founder Luyolo Sijake and co-founders Thandwefika Radebe and Tapfuma Masunzambwa, Qwili drives digital inclusion in Sub-Saharan Africa through a hybrid software-hardware product that removes barriers to smartphone access and m-commerce participation.

It provides a hardware/software system to enable merchants send and receive payments. The hardware/software system is essentially a low-cost NFC-enabled smartphone called Qwili Pula with an installed propriety software which transforms the smartphones into POS devices permitting merchants to sell value-added services such as data and pay-TV subscriptions, groceries and clothing to their customers. These Qwili smartphones cost between $60 and $70.

Qwili says it would use the investment for app development, recruit people in operations and development departments and hardware production.

Qwili says it operates a B2B model and attends to about 500 micro and small merchants in Southern Africa. Its typical merchant is a seller without a storefront that sells digital products to immediate communities and networks informally.

Qwili says it currently processes $75,000 monthly GMV from its 500 merchants. However, the South African platform — which saw strong turnover growth of over 300% from Q1 to Q2 of 2022 — plans to get those numbers up to $1 million from 3,000 merchants by the end of the year after it expands into neighbouring Botswana.

Qwili’s CEO, Luyolo Sijake, says it doesn’t profit from selling smartphones, as it is just an enabler to the company to impact merchants that use the platform for commercial purposes. It takes a commission on every sale made on its application. “We’re all about enabling people who are currently digitally excluded, to participate in the various forms of value that being digitally included has to offer,” he said. “So the real barrier to that has been hardware: a reliable quality smartphone being too expensive, which means access to the mobile internet being too expensive. So we hope to continue making smartphones available at below cost.”

“We believe that Qwili is both highly scalable and high impact. Qwili agents love the entrepreneurial opportunity that Qwili provides them while giving their community access to e-commerce and to fairly priced goods and services,” says Bastiaan Hochstenbach, co-founder and managing partner at E4E Africa on the investment.

“Qwili’s founding team is exceptional, and the business model is a strong fit with E4E Africa’s aspiration to support diverse founders in creating a thriving, innovative, and inclusive Africa.” he added