It’s Tuesday, and today we’re discussing Woliz, a Moroccan retail tech and fintech solution. Founded in 2024 by Kamal El Hardouzi, Karim Hamri, Othman Jabrane, and Ismail Amri, the company has just completed a $2.2 million pre-seed round led by Sanlam Maroc.

As a regular reader of this newsletter, you won’t be surprised when I tell you that 80% of Morocco’s grocery retail is controlled by over 240,000 small stores, also called nanostores. These stores in many ways resemble India’s kirana stores. They are usually family-owned and serve both as businesses and as integral parts of their neighborhoods.

Customer loyalty is built on personal connections and personalized service. Stores often have flexible opening hours, break products into smaller quantities that match the purchasing power of customers, and sometimes even offer home delivery.

But probably the most notable feature of these stores is karni, a month-to-month credit system that has been maintained for generations. Karni itself is a handwritten ledger where storekeepers record goods bought by customers on credit, which are then paid off by the end of the month. The loans are interest-free. But that’s not even the most surprising chicken nugget. That distinction goes to the fact that 30% of credit provided by store owners has nothing to do with the products sold in the store. This is about as informal as credit gets.

So aside from their direct role as merchandise providers, nanostores are also responsible for sustaining a neighborhood’s social fabric and supporting lower-income households.

But they are getting squeezed by traditional retail that has expanded in Morocco. For one, 78% of the country is desert, so major retailers primarily focus on Rabat and Casablanca, with that corridor responsible for 50% of all retail sales.

Chain retailers, with their scale and capabilities, understand how to manage logistics, how to price products correctly, and how to digitize as much of their operations as possible.

Nanostores have none of that. They are largely analog, which introduces numerous constraints.

Because most payments are cash-based, stores have limited ability to obtain credit themselves, which is a vital tool for competing with large retailers. Without credit, stores carry limited assortment and become highly reliant on sustained demand. If a new supermarket opens across the street, they inevitably lose some customers and generate less revenue. That, in turn, hampers their ability to maintain adequate assortment even further.

And speaking of assortment. Because stores operate in an analog way, they cannot adequately track their sales. They generally understand how pricing affects demand, but not precisely. Moreover, they often have limited knowledge about how to price products in the first place.

There is also the issue of working with distributors. Stores are small and are in no position to dictate the conditions under which they deal with distributors. Distributors hold leverage over store owners, squeezing margins in an already low-profit business.

The government understands that these stores are a vital piece of the social fabric, both culturally and economically. And while government support is important, it cannot digitize nanostores on its own. It needs help.

Woliz is the source of that help.

Woliz digitizes these analog nanostores with an offering that bundles three components: 1) a dedicated in-store terminal (POS); 2) a store-management app; 3) a partner network.

At the center of Woliz’s solution is the terminal that concentrates the core workflows: sell, stock, pay, all in one device. On the software side, Woliz offers a complete POS management app that includes:

The product is, in many ways, about creating parity between major retail chains and nanostores, with the latter now having access to many of the same tools as established stores.

Managing suppliers, and even finding them in the first place, is hard. Through partnerships with major FMCG brands, Woliz enables store owners to order directly through the terminal. This reduces the complexity of the purchasing process, from finding partners to work with, to simply placing a purchase order.

Next in leveling the playing field is consumer loyalty. Traditionally, nanostores have built loyalty in informal ways, like with the credit example. But major chains offer consistent savings through loyalty programs, and that’s something nanostores can’t easily compete with. Woliz created a consumer-facing value layer that allows customers to access promotions and rewards through nearby stores, helping connect offline retail with digital engagement.

Large retail chains typically support multiple payment methods. Woliz enables smaller store owners to offer digital payment options, allowing them to compete in an increasingly cashless marketplace.

Digitizing payments ties directly into order management. When a payment occurs, inventory is automatically updated through the stock-management module. This data can then be used to support AI-assisted replenishment.

But the financial component goes beyond payments. Through the terminal, customers can pay not only for goods, but also make bill payments and money transfers. That unlocks up to 30% more revenue for store owners, and I think it’s a strong value proposition. For one, there are many more local stores than bank branches, which makes this convenient. Also, if everything else is equal, you would rather the commission be earned by your neighborhood store than by a faceless financial institution.

There are also smaller features that the POS terminal offers, like surveys and tasks, but the core idea remains the same: how can we bring nanostores into the digital era while preserving what made them special in the first place, namely their density and customer-facing nature.

Woliz acts as a connector between various actors and nanostores. It allows the latter to connect to brands, distributors, telecom operators, public institutions, and others, making their businesses both easier to run and more resilient. For the former, it’s a way to acquire potentially hundreds of thousands of customers.

Woliz provides nanostores with in-person support from field agents who work face-to-face with owners. For Woliz’s partners, that means the burden of acquisition and support lies with Woliz, not the partner, which makes the partnership a non-lose proposition. For some partners, like financing providers, this brings in new clientele. For others, like FMCG brands, it reduces the number of field visits and therefore lowers costs. Either way, without the partnership everything stays the same. With it, there is a clear economic upside.

Woliz has already formed some impressive partnerships, with a major one being Attijari Payment, a subsidiary of Attijariwafa Bank, and Visa, which help handle the payments and financing side of the business.

Another key partner is the Ministry of Industry and Trade, which together with Woliz is developing a training program dedicated to helping retailers adopt digital solutions. This is probably the most effective way to acquire customers, since directly selling a solution that is so disruptive to established ways of doing business would be a tall order.

Woliz makes money from what it calls performance commissions. It serves ecosystem partners, and when those partners improve operational performance or reduce costs through Woliz, the company takes a share of that gain.

It’s operationally hard to scale a business that depends on training, hardware deployment, field agents, and ongoing in-person support. Revenue is also dependent on partners believing they are getting incremental value that Woliz can credibly attribute to its work. Woliz doesn’t make money from nanostores directly, which is great for small retailers and helps with acquisition.

However, Woliz still pays for adoption, while not controlling monetization. That depends on a separate side of the business: ecosystem partners continuing to see measurable gains.

You rarely see a business that doesn’t monetize the product it directly provides. And I think that type of business is harder to scale and makes it more difficult to see how inputs affect the bottom line

The bull case is that Woliz becomes the default distribution partner for large enterprises that always wanted to capture nanostores but never had the capacity or the ability to do so.

At some point, if Woliz reaches a critical mass of nanostores, it’ll have basically a monopoly on dealing with these stores. Merchants will have no desire to switch from Woliz, since it’s free, and so competitors won’t be able to offer the same audience size to prospective partners.

And that’s how Woliz can build lock-in. Stores won’t switch because of costs, partners won’t switch because no other providers can offer such access to merchants.

What’s the one lesson investors and founders can take away from Woliz?

There are many ways to make money. The traditionally right answer might not be the only answer. We don’t know whether Woliz will succeed. But we do know that they took a non-traditional path to monetization, which could unlock a non-linear outcome for the company.