Ghanaian startup Swappaholics is re-inventing the age-old barter trade system into a 21st century platform that empowers individuals and businesses to connect and swap products, skills and services in a social setting without the need for money.
This quickfire expansion is set to continue, with Nigerian and South African launches planned by end of 2017. Chief executive officer (CEO) and co-founder Francis Obirikorang told Disrupt Africa the startup was updating a traditional way of obtaining necessary goods for the online age.
“Swappaholics is introducing an alternative trade currency, the social or in-kind currency which is going to break the monopoly of money as the only legal trading currency in emerging markets such as Africa and Asia,” he said.
The platform allows users to post items they would like to swap and identify things they want. Once a match is made it also assists with the physical process of making the swap.
More than 3,500 people have used Swappaholics since its launch, notably to exchange electronics items such as laptops, mobile phones and games consoles.
“We’ve had cases where people have swapped properties for cars,” Obirikorang said.
The idea for Swappaholics was born a few years ago when Obirikorang and co-founder Michael Ocansey were strolling through a busy part of Accra that is noted for the sale of consumer electronic goods.
“In a visit to one of the shops, we noticed an interesting trade: people came in and traded their electronic devices for a newer one they wanted,” Obirikorang said.
“The valuation of the items was done by visual inspection, and, after haggling on the valuation, the swapper and the shop owner exchanged the items.”
This trade, which happened offline and in a small environment, got the pair thinking about the prospect of bringing back swapping through a bigger and more scalable platform – online.
“We built Swappaholics to enable people with low or no disposable income who are cut off from the current e-commerce trade to be able to have an alternative trade option which doesn’t involve money, but rather just their product or services,” he said.
The idea was immediately popular. Swappaholics was part of the Turn8 Round 4 Accelerator in Dubai last year, and raised US$30,000 seed funding. It has since been self-funded, but is now raising US$450,000 to assist its product development, business development and marketing.
The swapping itself may be for free, but Swappaholics is all for-profit. Obirikorang said it operates a hybrid business model.
“We make money from freemium subscriptions, where third party businesses are licensed to customise and use the Swappaholics application,” he said.
The startup’s app, Safe Swap, handles the swap process on behalf of third party swappers, including product verification, handling and shipping. Meanwhile, it also sells featured Swap advertisements, where swappers pay a premium to have top advert placements on the platform.
Raising further funding will be crucial to the continued growth of the platform, Obirikorang said.
“Being a startup, you are always limited in terms of team and finances, and our critical setbacks have been these two,” he said.
“Since you’re limited in terms of team size, you become a jack of all trades because you do not have the necessary funds to recruit more hands or outsource. This tends to slow your growth.”