Badili, a Kenya-based smartphone re-commerce startup, raised $2.1m in pre-seed funding to expand operations in Africa; one of the fastest growing mobile phone markets in the world.
Venture Catalysts, V&R Africa, Grenfell holdings and SOSV participated in the round, as did family offices and angel investors from Kenya, Nigeria, South Africa and India.
With this new funding, Badili plans to explore new growth opportunities in West Africa, where it hopes to tap into a growing demand for affordable second-hand smartphones, even as it expands its operations in Kenya, Uganda and in Tanzania.
“We are launching in Uganda and Tanzania and have established strong partnerships with original equipment manufacturers (OEMs). Over the next six months, we will expand to a few markets in West Africa to get a foot in the door of some of Africa’s major markets,” said Rishabh Lawania (CEO), who co-founded the startup with Keshu Dubey (CTO) earlier this year.
Badili trades and buys back on behalf of major phone OEMs and resellers, and has so far signed partnerships with key brands like Samsung. It also buys devices from individuals.
Lawania told TechCrunch that he launched the startup after noticing that re-commerce did not exist in Kenya as a legitimate and trustworthy industry, but the demand for second-hand devices was high.
“A former employee of mine in Kenya was arrested for buying a stolen phone, and it struck me that most people can’t really buy second-hand electronics here because the only option “they have is the gray market, which is risky. That’s when Badili’s idea kicked in. I thought something really had to change,” said Lawania, also the founder of Wee Media (parent company of the WeeTracker information site) and Africa gadgets.
Lawania said 60% of Badili’s customers are people upgrading from a feature to a smartphone, adding that the devices typically cost less than half their original price.
“We’re providing an alternative for people who don’t want to pay top dollar for a device, and I’m more excited that we’re able to help many consumers buy their first smartphone,” Lawania said.
Affordability remains a major barrier to smartphone penetration in most countries in Africa, including Kenya, where feature phones still dominate the handset market. Recent data from the Communications Authority of Kenya indicates that while smartphone penetration deepens, the market share of feature phones currently stands at 55.1%.
Across Africa, the latest data from International Data Corporation (IDC) also shows consumers have been switching to cheaper options, with shipments of feature phones up 10.6% while Smartphone shipments fell 7.9% in the second quarter of the year due to rising inflation and a tougher economic outlook.
While the report predicted a recovery in smartphone shipments, affordability and consumer purchasing power will continue to play a huge role in smartphone penetration on the continent.
Additionally, Badili taps into the growing market for refurbished and used mobile phones, which is expected to reach $146 billion by 2030, growing at a CAGR of 11% between this year and 2030, driven in part by the adoption of smartphones in emerging countries.
Badili sources the phones through its platform and network of stores and agents across the country, and uses its price estimation algorithm, which takes into account various factors including phone age and model, to calculate the value of the phone. Phones are refurbished, refurbished and resold with a one-year warranty.
Lawania said Badili takes details, including the vendors’ identity and photo, and also asks them to sign an affidavit stating that they are the rightful owners of the devices. To be on the safe side, he said, Badili has also implemented a system that can flag frequent sellers.
He said he was building and expanding the technology, systems, partnerships and networks needed to build the most trusted and largest re-commerce consumer electronics market in Africa.
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