In 2014, Uber, the poster child for tech disruption, decided to enter its second African country, Nigeria. Basically, when a company makes such a decision, it would have to take the necessary steps to be considered legally operative in that country and do specific research on how to fit the product brand into that locality.
As Uber was the first of many ride-hailing apps in the country, it was virtually high-risk for the company. It had to comply with all local standards and rules relating to its product offering and model even when there wasn't a competitor to benchmark against.
To handle this, a typical move would be to contact a law firm that provides such services — market entry, permit authorisation, and advisory requirements — for multinational companies looking to enter Africa. Typically, the company could go the route of getting multiple legal counsels in all the jurisdictions they want to operate in.
Eunice Olopade (CEO) and Usman Sotunde (CTO), lawyers working in a law firm, thought about how cool it would be if all these could be done on a single interface. With years of experience in the bag, they decided to build a simple system that works. Soon, along with Abdulwaheed Yusuf (COO), they co-founded Sidebrief, a registration tech (regtech) startup.
Up until the last decade, continental and international expansion wasn’t a thing among African startups. The region's fragmented nature has been a major challenge for global companies looking to enter the continent.
“There was no single platform where you could get information about access into the African market. If you wanted to get into the African market today and you had the intention to enter five countries, you’ll have to interface with multiple lawyers, multiple advisors, multiple regulatory bodies to be able to set up across these different markets,” Olopade hints.
Unfortunately, startups based in Africa aren’t insulated from this challenge. On paper, the introduction of the African Continental Free Trade Area (AfCFTA) in 2019 was expected to cause a boost in trade, economic growth, and integration across the continent. However, not much has been achieved so far.
And this is where Sidebrief comes into play. Its intention is “... sharing the roadmap on how to effectively expand across jurisdictions without having to hire somebody here and there.”
And this is not limited to African countries, as Olopade confirms that the regtech startup also assists African founders with incorporation, tax registration, tax returns, and overall structuring for those that have their holding companies outside the continent, like Delaware, US.
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Harmonising cross-border expansion
Olopade points out that simply hiring lawyers in all the locations could affect the validity of the overall set-up of the business as they may not always provide definitive information about all requirements.
She adds that the role of legal entities often ends with company incorporation. Meanwhile, there are tax registration requirements to be fulfilled, business-specific certifications to acquire, and industry licences/permits to get. With no access to such information, set-up is always incomplete.
“We’ve built a platform that helps not only with market entry but with business compliance across several countries in Africa. Ongoing business compliance is arguably more important than just setting up, so the platform that we’ve built over time is what we primarily use to ensure that our clients and prospective clients are up to date on their business compliance requirements while running their businesses. There was a gap here.”
Trusting the process
Sidebrief does not only give access to the necessary information and assist companies with all the steps, but it also saves them the stress of having to make any contact with the organisations issuing licenses or permits. Basically, engaging lawyers directly would demand more money and time — in terms of billable hours — same with trying to get the attention of regulatory authorities.
Olopade boasts about the seamless nature of the Sidebrief platform's transaction process.
“Everything that we do, from corporate registrations to tax to intellectual property registrations can be done on the platform. Once you sign-up on the platform, we take it from there. If we need to reach out to you for more information, we’ll do that. But primarily, once you provide all the necessary information and upload the required documents, you could go ahead and pay.”
Due to the low-trust nature of the African market, Sidebrief also issues invoices on request or arranges virtual calls or physical visits for negotiations.
After payment, Sidebrief engages the regulatory authority on behalf of the client, gets the requested document, and uploads it into the customer’s account. This is followed by a prompt. As is standard practice, duration and cost are determined by the market and services required.
“Product pricing differs across markets, we offer one time fees and bundled services depending on add ons but we are moving towards a uniform fee across markets. Entity Incorporation, Tax Registration and IP Registration are just the basics. There are several other layers we are now building on the stack which we will be rolling out, like cross-border tax management.”
Services can be delivered between 24 hours to a few weeks and could cost between $200 to $5,000, which Olopade believes is highly competitive compared to individuals.
One major metric considered in ranking countries' ease of doing business is how long it takes to set up and begin operating a business. This indicator comprises the procedure, time, and cost of corporate registration, asset registration, securing permits, and enforcing contracts, among others. To an extent, these could be determining factors as Sidebrief offers its services.
The founder, however, says this doesn't affect the entire value offering chain. She adds that the team is currently working on product pricing and creating a synergy such that the fragmented nature of the African market does not adversely impact its offerings. Nevertheless, there are currently fixed prices per market.
Not just ‘a’ competitive advantage
Founded in 2019, Sidebrief is the brainwork of two lawyers and an accountant who have played in the companies registration space and have occupied similar roles in various global companies.
Currently, the startup comprises 15 professionals manning its different rolling parts in different markets. The team’s efforts are complemented by existing relationships with a network of regulators across all the African markets it operates in, which tells the story of its success so far.
Although Sidebrief is working to cover all 54 African countries, it has capacity in over 30 countries, including Nigeria, Ghana, Ivory Coast, Kenya, Senegal, Egypt, Morocco, Rwanda, Uganda, Tanzania, South Africa, and Zambia.
How did the startup pull this off in less than three years?
Olopade attests that this is in part hinged on the founders’ solid professional backgrounds and interests.
“Having worked on the World Bank Doing Business project, it exposed me to a lot about starting and doing business in Africa, the challenges and the prospects. Interacting and interviewing lawyers across several countries and understanding the diverse legal and regulatory compliance framework as part of the data collection process across several countries highlighted the need for digitalizing and automating processes,” she speaks of her experience.
As easy as this looks, some countries have proven more difficult than others. In the World Bank Doing Business Report for 2019, Rwanda (38th) was the only African country among the top 50 countries; Morocco and Kenya came close, ranking 53rd and 56th, respectively. Meanwhile, Nigeria occupied the 131st position.
For Olopade, the situation hasn’t improved in Nigeria, which has proven to be one of the toughest markets to deal in. Meanwhile, in East Africa, it has been quite challenging with respect to the hiring process and getting the right talent fit. In addition to that, technological adoption is a general problem with the African market because regulatory parastatals have only a few automated processes.
Sidebrief plans to attract and serve more clients within the coming months such that it becomes a household name when it comes to cross-border expansion in Africa. Olopade mentions how the startup has enjoyed a first-mover advantage and referrals from startups like 54gene, OkHi, Spleet, and Shuttlers, among others.
There are also plans to build a robust technology that will automate virtually all processes on the platform to make it seamless for customers.
