Payroll startup Cercli signs $4M deal to build ‘Rippling for the Middle East and North Africa’

Having scaled and led teams at two of the largest unicorn firms in the Middle East and North Africa (MENA) region, Thank you Azmi AND David Reche they got here across what they believed in it was a $2 billion opportunity. They realised that their previous employers at Careem and Kitopi, in addition to other local businesses in the region, were fighting payroll management and high compliance costs due to human errors.

circle themThe startup, which launched in January, is solving that problem with software it developed that lets firms in the MENA region 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 has backed Cercli, which says it’s constructing “Rippling for MENA” as the founders “create a solution to 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, saw this challenge firsthand when he led the global expansion of cloud kitchen startup Kitopi, where he managed payroll for employees in multiple countries.

“I was doing the same thing Deel was doing in Kitopi. When we were entering a new market, we had to find a payroll worker to pay the people we would have to hire in those markets,” Azmi explained to TechCrunch. “And that’s where I ran into the problem that we’re solving now, which is payroll and all the aspects of it where these companies didn’t have a system to handle and process payroll for their entire workforce.”

The former Kitopi executive believed that if distinguished tech startups in the region were fighting pay inefficiencies, other firms, no matter size, were likely to face similar challenges. To confirm this, he interviewed greater than 30 firms, from Saudi Aramco, considered one of the world’s largest corporations, to a small shop in Dubai’s Karama district, to understand their pay practices.

According to his findings, smaller firms often depend on spreadsheets, that are prone to data privacy risks, fraud and errors. On the other hand, larger firms spend thousands and thousands on ERP solutions corresponding to Microsoft Dynamics, SAP or Oracle to manage payroll in-house. He, together with Reche, former CTO of London-based but Africa-focused sports platform KingMakers, launched Cercli to unify payroll management across the region, replacing these outdated methods with a single platform.

The platform, which goals to reduce human error and ensure firms are fully compliant with regulations, has replaced individual HRIS systems and distant payroll solutions corresponding to Deel and Remotepass for many shoppers because it provides more efficient services, Azmi said.

He explains why. Cercli initially focused on constructing a native payroll system for firms to manage and pay employees locally. However, as the platform grew, customers began to demand distant payroll solutions. While global platforms like Deel or RemotePass were useful for managing distant contractor payroll or worker records, they weren’t reliable for handling local payroll needs.

“They started asking if they could migrate everything to our platform because other systems couldn’t handle local payroll. That led us to develop two or three different systems to meet their global needs,” Azmi notes. “Some customers were also using standalone HRIS products like BambooHR as their payroll system. We combined those different systems but localized them for MENA companies.”

Rippling Comparison

According to Azmi, complying with specific labor laws and processing payroll for unbanked employees on behalf of clients are examples of how localization adds value, since the payroll costs of not meeting compliance requirements will be quite significant. “Companies face the same challenge: the lack of a single source of truth for their most valuable asset—their labor—often one of the largest expenses on their P&L,” Azmi noted.

Cercli focuses on mid-market businesses, where it believes the need for integrated and compliant HR, finance, accounting, legal and IT solutions is most evident. Adhering to the specific rules and laws of the MENA region, Cercli enables firms with local and global employees to manage services corresponding to payroll, compliance, worker records, expense reimbursements, leave implementation and approval.

Azmi notes that the platform, which integrates with various workplace tools to streamline these processes, is being built horizontally across multiple product verticals and markets. He credits his team, 80% of whom are in product and engineering and have previously worked at firms like Microsoft, ADP and Accenture, for that.

“I think we’re closest to Rippling because we went very horizontal, building the entire HR and payroll stack for companies in the region. For us, this is a wedge into building a much bigger product for customers that will help automate all that other manual back office work in their company,” Azmi said, adding that the startup acts as a payroll sub-processor for global payroll platforms including Rippling, Workday and Deel.

The startup, whose clientele ranges from two to 500 employees, launched earlier this yr and says it has grown 25% month-over-month since January. It has paid out greater than $23 million in worker salaries in 31 countries.

Emerging Markets Wage Demand

Demand for payroll and HR solutions is soaring in emerging markets as global firms seek greater value. Recent acquisitions underscore 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’s PaySpace for just over $100 million.

While these acquisitions suggest that some emerging markets are ripe for consolidation, others, corresponding to the MENA region, are still developing. Azmi notes that Payspace was acquired primarily for its payroll API, as Deel wanted to leverage its experience in “codifying laws and regulations” across Africa. In contrast, no other company has “codified regulations” in the MENA region, and Circli goals to be considered one of the first to achieve that.

RemotePass, which recently localized its products for the MENA region, and Workpay, one other YC-backed payroll company focused on Africa, could change into competitors to Cercla if their products and markets intersect.

Y Combinator participated in Cercli’s seed round, which was led by COTU Ventures and Rebel Fund. Several executives from Ramp, Rappi, Kitopi, Careem, and Rippling also contributed to the round. The startup, which has a one-year payroll, will use the funding to expand its team, develop related products to serve other customer segments, including SMEs and enterprises, and expand its presence in its core markets.