Akeed Azmi and David Reche stumbled upon what they believed to be a $2 billion opportunity while scaling and managing teams at two of the Middle East and North Africa (MENA) region's largest unicorns. They noticed that their former employers, Careem and Kitopi, as well as other local businesses in the region, were struggling with payroll administration issues caused by human error and high compliance costs.
Their startup, Cercli, which launched in January, is addressing this challenge by developing software that enables companies in the MENA region to hire, manage and pay employees around the world. The potential of Cercli's platform caught the interest of investors, leading to a $4 million seed round led by San Francisco-based Afore Capital, the fund's first deal in the region.
Afore Capital funded Cerculi, which claims to be building a “Ripling for MENA,” because the founders are “building to solve one of the region's biggest challenges: managing a global workforce while meeting compliance requirements,” said managing partner Anamitra Banerji.
CEO Azmi, who previously led operations at Kitopi and Careem, encountered this challenge first-hand when he was leading the global expansion of cloud kitchen startup Kitopi and managing employee payroll across multiple countries.
“I was doing what Deal was doing with Kittopi, which was going into a new market and having to find employees of record to pay the people that we had to hire in that market,” Azmi explained in an interview with TechCrunch. “And that's where I ran into the pain point that I'm trying to solve now, which is payroll and all the issues that come with that, and these companies didn't have the systems in place to run and process payroll for all of their employees.”
A former Kitopi manager reasoned that if a prominent tech startup in the region was struggling with inefficient payroll, other companies, regardless of size, were likely to face similar challenges. To test this, he interviewed more than 30 companies, ranging from one of the world's largest companies, Saudi Aramco, to a small, mom-and-pop shop in Dubai's Karama district, to understand the realities of their payroll practices.
His findings show that small businesses often rely on spreadsheets, which are prone to data privacy risks, fraud and errors, while larger companies spend millions on ERP solutions from the likes of Microsoft Dynamics, SAP and Oracle to bring payroll management in-house. Together with Reche, former CTO of London-based, Africa-focused sports technology platform KingMakers, he launched Cercli to unify payroll management across the region by replacing these outdated methods with a single platform.
The platform aims to reduce human error and ensure full compliance for companies, and for many clients it has replaced separate HRIS systems and remote payroll solutions such as Deel and Remotepass as it provides a more efficient service, Azmi said.
He explains why: Cercli initially focused on building a native payroll system for companies to manage and pay their employees locally. But as the platform grew, clients began requesting a remote payroll solution. Global platforms like Deel and RemotePass were great for managing remote contractor payroll and employee records, but they weren't reliable for handling local payroll needs.
“They started asking if they could migrate everything onto our platform as other systems couldn't handle local payroll. This led us to develop two or three different systems to serve their global needs,” Azmi says. “Some of our customers were using standalone HRIS products, such as BambooHR, as their system of record. We combined these different systems but localized them for companies in MENA.”
Comparison of ripples
According to Azmi, complying with certain labor laws or processing payroll for unbanked employees on a client's behalf are examples where localization adds value, and the payroll costs incurred from not meeting compliance requirements can be quite costly. “Businesses face the same challenge – not having a single source of truth on their most valuable asset: their employees, who are often one of the biggest expenses on the profit and loss statement,” Azmi said.
Cercli focuses on mid-sized businesses, where the need for an integrated compliance solution across HR, finance, accounting, legal and IT is most pronounced. Cercli enables businesses with both local and global employees to manage services such as payroll, compliance, employee registration, expense reimbursement, onboarding, leave approvals, etc. by adhering to specific regulations and laws in the MENA region.
Azmi points out that the platform, which integrates with a variety of workplace tools to streamline these processes, is built horizontally across multiple product areas and markets, something he attributes to his team, which is made up of 80% product and engineering people with experience at companies like Microsoft, ADP and Accenture.
“I think the closest we are to Rippling is that we have worked very horizontally and built the entire HR and payroll stack for companies in the region. For us, this is a catalyst to build a much bigger product that helps customers automate all other manual back-office work they do across their business,” Azmi said, adding that the startup acts as a payroll sub-processor for global payroll platforms such as Rippling, Workday and Deal.
The startup, which serves businesses with between two and 500 employees, was founded earlier this year and claims to have grown 25% month over month since January, disbursing more than $23 million in employee payroll across 31 countries to date.
Salary Demand in Emerging Markets
Demand for payroll and HR solutions is surging in emerging markets as global enterprises seek greater value. Recent acquisitions highlight this trend. Last month, New York-based fintech company Payoneer acquired Singapore-based global HR and payroll startup Skuad for $61 million. In March, Deal acquired South Africa-based PaySpace for just over $100 million.
These acquisitions suggest that consolidation is underway in some emerging markets, while others, such as the MENA region, are still developing. Azmi notes that Payspace was acquired primarily for its payroll API, and Deel sought to leverage its experience in “codifying laws and regulations” across Africa. In contrast, no company in the MENA region has yet “codified regulations,” and Circli aims to be the first to achieve this.
RemotePass, which recently localized its product for the MENA region, and Workpay, an Africa-focused YC-backed payroll company, are potential competitors for Cercli if their products and markets intersect.
Y Combinator participated in Cercli's seed round, including COTU Ventures and Rebel Fund. Several executives from Ramp, Rappi, Kitopi, Careem and Rippling also contributed to the round. The one-year-old payroll startup plans to use the funding to expand its team, build related products to serve other customer segments, including small businesses and large enterprises, and expand its presence in its core market.