Payroll Startup Cercli Raises $4M to Expand in MENA

Identifying a $2 billion opportunity from payroll challenges at MENA unicorns, Akeed Azmi and David Reche founded Cercli to streamline global workforce management for regional businesses

The potential of Cercli’s platform has piqued the interest of investors, resulting in $4 million in pilot funding led by San Francisco-based Afore Capital. This transaction represents the fund’s inaugural transaction in the region.

Cercli, which asserts that it is constructing the “Rippling for MENA,” received backing from Afore Capital.

According to managing partner Anamitra Banerji, the founders are “constructing to address one of the most significant challenges in the region: the management of a global workforce while adhering to compliance regulations.”

While leading the global expansion of cloud kitchen startup Kitopi, Azmi, who had previously served as the operations director at Careem and Kitopi, had to manage the payroll of employees in numerous countries.

“I was performing the same tasks as Deel at Kitopi.” Azmi elaborated in an interview with TechCrunch that when we entered a new market, we would need to identify an employee of record to pay the individuals we would need to contract.

The pain point that we are currently addressing is payroll and its associated adjacencies. These companies lacked a system to manage and process payroll for their workforce. This is where I encountered the issue.

The former manager of Kitopi believed that if prominent tech startups in the region encountered payroll inefficiencies, other companies, irrespective of their scale, would likely encounter comparable difficulties.

He interviewed more than 30 companies, ranging from Saudi Aramco, one of the world’s largest corporations, to a small mom-and-pop store in Dubai’s Karama area, to ascertain their payroll practices to verify.

According to his research, fewer businesses frequently employ spreadsheets but are susceptible to data privacy risks, fraud, and errors.

Conversely, larger organizations allocate millions of dollars to ERP solutions such as Oracle, SAP, or Microsoft Dynamics to facilitate internal payroll management.

He and Reche established Cercli, the former CTO of KingMakers, a sports-tech platform based in London that concentrated on Africa.

The purpose of Cercli is to replace the outdated methods of payroll management with a unified platform, thereby unifying the region.

Azmi stated that the platform has replaced individual HRIS systems and remote payroll solutions such as Deel and Remotepass for several customers due to its more efficient services designed to reduce human error and ensure complete compliance for companies.

He explains this. Cercli initially concentrated on developing a native payroll system that enabled Nesses to administer and pay its employees locally.

Nevertheless, clients began to request remote payroll solutions as the platform expanded. Although global platforms such as RemotePass or Deel were beneficial for managing remote contractor payroll or employee records, they were unreliable for managing local payroll requirements.

“They began to inquire whether it would be possible to transfer all of their operations to our platform, as the other systems were incapable of managing local payroll.”

“As a result, we developed two or three distinct systems to meet their global requirements,” Azmi observed. “A few customers were also employing standalone HRIS products, such as BambooHR, as their record system.”

We integrated these disparate systems but tailored them to the specific needs of enterprises in the MENA region.

The comparison of rippling effects

Azmi cites compliance with particular labor laws and the processing of salaries for employees without bank accounts on behalf of clients as examples of how localization adds value, as payroll expenses that result from noncompliance can be pretty substantial.

Azmi observed, “Companies are confronted with the same challenge: the absence of a single source of truth for their most valuable asset—their workforce—which is frequently one of the largest expenses on their P&L.”

Cercli concentrates on mid-market enterprises, where the necessity for integrated and compliant HR, finance, accounting, legal, and IT solutions solutions is most apparent.

Cercli facilitates the management of services such as payroll, compliance, employee-of-record, expense reimbursements, induction, and leave approvals for businesses with both local and global workforces by adhering to the specific rules and laws of the MENA region.

Azmi observes that the platform, which integrates with various workplace tools to simplify these processes, expands horizontally across multiple product verticals and markets.

He attributes this achievement to his team, which comprises 80% of individuals with experience in product and engineering from organizations such as Accenture, ADP, and Microsoft.

“The closest we are to Rippling is that we have taken a very horizontal approach, constructing the entire HR and payroll stack for businesses in the region.”

“For us, this is the catalyst for the development of a significantly larger product that will assist customers in automating all of the other manual, back-office tasks occurring within their organizations,” stated the co-founder.

The venture, which has a clientele of companies with two to 500 employees, was established earlier this year and has reported a 25% month-over-month increase in growth since January. It has now disbursed over $23 million in employee compensation across 31 countries.

Demand for payroll services in developing economies

The demand for payroll and HR solutions is increasing in emerging markets as global companies look to add value. Recent acquisitions underscore this trend.

For instance, Payoneer, a fintech company headquartered in New York, acquired Skuad, a global HR and payroll startup based in Singapore, for $61 million last month. PaySpace, headquartered in South Africa, was acquired by Deel in March for just over $100 million.

While these acquisitions indicate that specific emergent markets are primed for consolidation, others, such as the MENA region, are still developing.

Azmi observes that Payspace was acquired primarily for its payroll APIs, as Deel sought to capitalize on its expertise in “codifying laws and regulations” throughout Africa. In contrast, Cercli is committed to being among the first companies in the MENA region to “codify regulations.”

RemotePass has recently localized its products for the MENA region. Workpay, another payroll company supported by YC that concentrates on Africa, could potentially become a competitor to Cercli if their products and markets intersect.

Y Combinator participated in Cercli’s seed round, which included the BF Fund and COTU Ventures. Numerous executives from Careem, Rippling, Kitopi, Rappi, and Ramp supported the round.

The payroll startup, which has been operating for one year, intends to allocate the funding to expand its workforce, developing complementary products to cater to additional customer segments, such as SMEs and enterprises, and establishing a more substantial presence in its core markets.