Startup of the Day: Bulgarian online marketplace Swipe.bg
Founded in October 2021 by Mihail Dimitrov, Ognyan Popov, and Nikola Pavlov, Swipe.bg is the first Bulgarian platform for buying and selling second-hand mobile phones. It refurbishes and puts these devices back to market with 2-year warranty, flexible payment methods, full-scale customer support, and after-sale service. So far, the company has raised over €500,000 from local VC investors during several rounds.
In the Startup of the Day column, founder and CEO of Swipe.bg Mihail Dimitrov shares the details about the startup’s idea, its product, and future plans.
“The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.”
Tell us about your startup. How does it work?
Swipe.bg builds trust and safety in the process of buying and selling second-hand smartphones. We ensure quick and hassle-free deals for sellers, as Swipe.bg buys the devices directly from the users after technical inspections. After that, Swipe.bg refurbishes and puts these devices back to market with 2-year warranty, flexible payment methods, full-scale customer support and after-sale service. In this way, buyers can feel confident that they buy fully functional devices but much cheaper than brand-new.
On top, Swipe.bg provides the option to users to protect the environment from excessive e-waste while still getting the latest smartphones. There will be over 5 billion old smartphones that will be thrown away globally in 2022. We’d like to expand all these benefits by including multiple partners into one ecosystem. That’s why we’re now creating buy-back programs for third-party players — telcos, retailers, online shops.
How did you come up with the startup’s idea? What was the reason/motivation behind it?
Before founding Swipe, I worked for the largest classifieds platform in the World. There I witnessed how strong the demand is for such devices but, at the same time, the lack of trust and safety associated with peer-to-peer deals. Moreover, personally, I’m very of a deals-driven and eco-friendly consumer. I had always wanted to interwind these two qualities into a business. Swipe.bg is namely that – it allows consumers to save money in an eco-smart way.
How long did it take to reach the prototype or MVP? What did you encounter?
Swipe.bg started as a typical start-up project – lean but mean 🙂 We deployed a WordPress site, administered the whole process manually, called clients from our personal phones, sent individual emails, etc. Everything was extremely slow, there were human mistakes on every step of the process, but we accomplished the most important thing for a starting project — market validation. Then, we attracted external financing and started building a custom platform and fully automated process, which is allowing us to scale now at tremendous rates.
When exactly did you launch your product? Or when the launch is planned?
We launched the prototype in October 2021, but the actual current and custom platform was live in July 2022.
Tell us about the startup’s business model. How do you monetize your product?
If a user wants to sell their old smartphone directly to another end-user, they can offer only a description and pictures to potential buyers. Our data shows, however, that 30% of all second-hand smartphones hide defects which are extremely difficult to notice at first. So, basically, buyers play gamble with chance 70-30 when buying directly from other end-users. Swipe.bg eliminates this risk for buyers while guaranteeing the deal for sellers. For this service we generate gross margin between buying and selling price which is our monetization method. Of course, we bear all the risk of not selling the devices or of future returns, etc. However, we manage to handle these risks for now 🙂
What are your target markets and consumers?
For now, our full focus is on our home market — Bulgaria. We see good market potential here and receive support from the whole business ecosystem. While growing, we will be able to streamline all our processes and prepare for international expansion. In mid 2023 we plan to start making gradual steps towards the Romanian and Greek markets. Some of our investors and shareholders have good business presence in these markets and will allow us to quickly close partnerships with key local players.
If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.
Basically, our market validation phase ended with the closing of seed investment round in Aug 2022. For the past 4 months we’ve grown revenue 13-fold and plan to close our first year of operations with €550 revenue. I believe these results are very encouraging for the potential we have, while still only scratching the surface.
What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.
At this point, we have 14 team members. The majority of them are technicians and customer support specialists. We’re looking to expand the team with sales experts who will help us unlock new sales and buying channels.
Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.
On an idea level, we closed a pre-seed investment of €25,000 from a local VC — Vitosha Venture Partners. We used this investment to position Swipe.bg on their radar for future rounds. And this is exactly what happened — Vitosha was our lead investor in the follow-up round of €500,000 we closed this summer. The other investors are: another local VC — NV3 and 12 angel investors with strong related experience who are instrumental with strategic business development.
What’s next? Tell us about your future plans.
Our main business goal is to create a network of partners, create a scalable partner model, and then replicate it regionally. We’re now negotiating with leading retailers and telcos in Bulgaria and will announce our first partners very soon.