Startup pitches with promises to provide various services to Africans — across different sectors — are commonplace now. And in trying to sweet-talk investors, what’s not taken into context or often disregarded is that Africa is a fragmented $3 trillion market. The continent is also home to more than 1.2 billion people with below-average disposable income, most living in landlocked nations.
It’s one of the few explanations for why intra-continental trade has proven difficult for years. But in 2019, various policymakers across different parts of the continent signed the African Continental Free Trade Area (AfCFTA) Agreement — a framework for Africa to be a single market for trade and services — to make intra-trade less painful (side note: the agreement is yet to make any significant impact.)
Adetola Onayemi was part of the negotiation team that saw the agreement take effect in January 2021. His experience from this activity, coupled with working as a technical adviser to the vice president’s office in Nigeria a couple of months back, led him to launch Norebase, a trade tech startup that has raised $1 million in a pre-seed round.
In an interview with TechCrunch, CEO Onayemi, a lawyer by profession, said the idea for Norebase came after various conversations on how his clients and colleagues in tech could leverage AfCFTA for their businesses.
“I had done all this work in policy, ease of doing business, free trade agreement, and I was advising some people in tech who would say, ‘listen, I just raised new capital to enter new markets, I dont know how I’m supposed to navigate it,’” the chief executive told TechCrunch on a call.
From Onayemi’s point of view, the growth of Africa’s digital economy revolves around gains in six segments: education, payments, logistics, transport, identity, and trade.
Trade has the least startup activity in a market that received $5 billion in VC funding last year. Tola believes this is because particular skill sets and an understanding of intracontinental nuances are needed to build beneficial solutions. And as someone with extensive knowledge and background, it made sense for him to take up the challenge.
“Providing a framework where people can operate and scale their solutions to several markets at once is incredibly important,” said Onayemi, who also co-founded Future Africa, an Africa-focused VC fund. “Our solution is for people in the local market moving into their first market or a company in their fourth market trying to scale their enterprise.”
The traditional options involve the painstaking process of interfacing with various law and accounting firms, trademark registries and hiring a team to manage these processes. Meanwhile, there’s also a trust and accountability factor between clients and firms hired to complete incorporation in another country.
“People can make mistakes in this sort of situation and Norebase has shared learnings over time to help people avoid these mistakes. We aggregate that knowledge and provide one platform that ensures you don’t have to worry too much about trust,” the CEO added. “From telling us to set up takes days. We know the rules, so you don’t have to spend time talking to lawyers and getting documents — we simplify all that.”
Onayemi launched Norebase with Tope Obanla in September 2021. It allows founders and businesses to start and scale across several African countries at once or periodically. According to Norebase, companies that use its platform can be incorporated in any African country within “a few minutes” and expand to new locations in a week. These countries include Nigeria, Kenya, Ghana, South Africa, Rwanda, Senegal, Togo, Tanzania, Ivory Coast, Egypt, Mauritius and Burkina Faso.
In addition, Norebase upsells on other services as long as they abide by regulatory and compliance requirements. They include opening bank accounts, virtual mailing addresses, and trademark and IP registration. Norebase doesn’t have a fixed fee and charges its clients based on the services they want, Onayemi said on the call without commenting on the company’s pricing range.
Recently, Norebase began offering African companies the option to incorporate in the U.S. It also launched Incorporation API, a plug-and-play service that allows other companies such as payment processors and banks to provide incorporation services to their customers.
Here’s a use case on how it works. Payment processors such as Flutterwave and Paystack have caps for unregistered merchants on their platforms, limiting the transactions they can make. There’s usually a prompt to these merchants to fully register their businesses before resuming usage.
The problem with this is that some merchants may refuse to continue this process despite knowing their earnings are at stake. So Norebase’s pitch to these payment processors — and other platforms with stringent KYC and regulatory commitments — is that via its Incorporation API, they can prevent this churn by letting merchants complete their registration right on their sites.
This incorporation-as-a-service plugin positions Norebase as a global player in the trade tech space. It’s one of the few companies offering such services, including Firstbase. The service, which is only available for incorporating businesses in Nigeria, the U.S. and Kenya, currently has nine partners; however, the CEO declined to mention their names.
On traction, Norebase claims to have delivered 100% month-on-month growth in transaction volumes for the last six months. It has also grown 40% month-on-month growth in revenue during this same period. Some of its regular offering clients include startups we’ve covered before, such as Brass, Nestcoin, Edenlife, Orda, Sudo Africa, and others like GetEquity, Workpay, Kloudcommerce and Patricia.
“What we do multiplies the valuation of almost every startup because then they can access more markets from the get-go,” said the founder of the partners using its platform.
Although the company plays in a market with little competition (Lagos-based Sidebrief is one company offering similar services), it won’t stay that way for long as the trade tech opportunity — particularly as African businesses continue to transact with each other and western countries — is poised to open up in the next couple of years and attract more funding.
Pan-African funds Samurai Incubate and Consonance Investment led Norebase’s pre-seed round. Other VCs include Sahil Lavingia of Gumroad, Kinfolk VC, Future Africa, Ventures Platform, Microtraction, Boleh Venture, Voltron Capital, Wuri Ventures and Afropeneur.
The round also welcomed participation from well-known executives in Africa’s tech ecosystem, including Shola Akinlade, CEO of Paystack; Odunayo Eweniyi, PiggyVest COO; Adia Sowho, the CMO of MTN Nigeria; Seni Sulyman, CEO of BlackOps.
Norebase will put the funds into bettering its plug-and-play API, broadening its trademark registration technology stack, and hiring more talent, Onayemi said.
Source: New feed