While scaling and managing teams at two of the largest unicorns in the Middle East and North Africa (MENA) region, Akeed Azmi and David Reche stumbled on what they believed was a $2 billion opportunity. They realized that their former employers at Careem and Kitopi as well as other local businesses in the region struggled with payroll management and high compliance costs due to human error.
Cercli, the startup they launched in January, addresses this challenge via software it developed that allows businesses in the MENA region to hire, manage and pay their global workforce. The potential of Cercli’s platform has attracted investor interest, leading to $4 million in seed funding led by San Francisco-based Afore Capital, marking the fund’s first deal in the region.
Afore Capital backed Cercli, which claims to be building the “Rippling for MENA,” because the founders are “building to solve for one of the region’s largest challenges: managing a global workforce while meeting compliance requirements,” managing partner Anamitra Banerji said.
CEO Azmi, who previously led operations at Kitopi and Careem, encountered this challenge firsthand while spearheading global expansion at cloud kitchen startup Kitopi, where he managed employee payroll across multiple countries.
“I was doing what Deel was doing at Kitopi. When we launched in a new market, we would have to find an employee of record to pay folks that we would have to hire in those markets,” Azmi explained in an interview with TechCrunch. “And that is where I came across the pain point that we’re solving now, which is payroll and all of the adjacencies around it, where these companies did not have a system in place to run and process payroll across the entire workforce.”
The ex-Kitopi manager thought that if prominent tech startups in the region struggled with payroll inefficiencies, other companies, regardless of size, would likely face similar challenges. To validate this, he interviewed over 30 companies, from Saudi Aramco, one of the world’s largest corporations, to a small mom-and-pop store in Dubai’s Karama area, to understand their payroll practices.
Per his findings, smaller businesses often rely on spreadsheets, which are prone to data privacy risks, fraud and errors. Larger companies, on the other hand, spend millions on ERP solutions like Microsoft Dynamics, SAP or Oracle to manage payroll in-house. He, alongside Reche, the ex-CTO at London-based but Africa-focused sports-tech platform KingMakers, launched Cercli to unify payroll management across the region by replacing these outdated methods with a single platform.
The platform, which aims to reduce human error and ensure full compliance for companies, has replaced individual HRIS systems and remote payroll solutions like Deel and Remotepass for several customers because it provides more efficient services, Azmi said.
He explains why this is the case. Cercli initially focused on building a native payroll system for businesses to manage and pay employees locally. However, as the platform grew, clients began requesting remote payroll solutions. While global platforms like Deel or RemotePass were useful for managing remote contractor payroll or employee records, they weren’t reliable for handling local payroll needs.
“They started asking if they could shift everything to our platform since the other systems couldn’t handle local payroll. This led us to develop two or three different systems to accommodate their global needs,” Azmi remarked. “Some customers were also using standalone HRIS products like BambooHR as their system of record. We combined these different systems but localized it for MENA businesses.”
The Rippling comparison
According to Azmi, compliance with specific labor laws and processing salaries for employees without bank accounts on behalf of clients are examples of how localization adds value, as payroll expenses that result from not meeting compliance requirements can be pretty significant. “Companies face the same challenge: lacking a single source of truth for their most valuable asset — their workforce — often one of the largest expenses on their P&L,” remarked Azmi.
Cercli focuses on mid-market enterprises, where it considers the need for integrated and compliant solutions across HR, finance, accounting, legal, and IT is most pronounced. By adhering to the specific rules and laws of the MENA region, Cercli enables businesses with both local and global workforces to manage services like payroll, compliance, employee-of-record, expense reimbursements, onboarding, and leave approvals.
Azmi notes that the platform, which integrates with various workplace tools to streamline these processes, builds horizontally across multiple product verticals and markets. He owes this to his team, 80% of whom are in product and engineering, with prior experience at companies like Microsoft, ADP and Accenture.
“I think where we’re closest to Rippling is we went very horizontal, building across the entire HR and payroll stack for businesses in the region. For us, this is the wedge into building a much larger product for customers to help automate all of that other manual, back office work happening across their business,” said Azmi, adding that the startup acts as a payroll subprocessor for global payroll platforms including Rippling, Workday and Deel.
The startup, whose clientele includes companies with two to 500 employees, launched earlier this year and claims to have grown 25% month-on-month since January. So far, it has paid out more than $23 million in employee salaries across 31 countries.
Payroll demand in emerging markets
Demand for payroll and HR solutions is surging across emerging markets as global companies seek more value. Recent acquisitions highlight this trend: last month, New York-based fintech Payoneer acquired Singapore-based global HR and payroll startup Skuad for $61 million. In March, Deel bought South Africa-based PaySpace for just over $100 million.
While these acquisitions suggest that some emerging markets are ripe for consolidation, others, like the MENA region, are still developing. Azmi notes that Payspace was acquired primarily for its payroll APIs, as Deel sought to leverage its experience in “codifying laws and regulations” across Africa. In contrast, no company has yet “codified regulations” in the MENA region, and Circli aims to be among the first to achieve this.
RemotePass—which recently localized its products for the MENA region—and Workpay, another YC-backed payroll company focused on Africa, could become competitors to Cercli should their products and markets intersect.
Y Combinator participated in Cercli’s seed round, which included COTU Ventures and Rebel Fund. Several executives from Ramp, Rappi, Kitopi, Careem, and Rippling also contributed to the round. The year-old payroll startup will use the funding to grow its team, build out adjacent products to serve other customer segments, including SMEs and enterprises, and expand its presence in core markets.
Source : Techcrunch
