🤯 SMEs Pay How Much for a Contract?
Order in? According to SA media outlets, someone dropped R20k on a single Uber Eats order in 2024, another placed 779 orders and saved themselves R18k by going with Uber One, while the top driver clocked 40’000km (once around the globe) for deliveries. PS: SA’s most searched item on Uber Eats? Crispy fried chicken with pap. Mooi. 🍗
In this Open Letter:
- By the book: The startup giving 2.5M SMEs a legal hand.
- SA’s smart geysers, same city “spyware” & declaring war on dashcams
- Business-friendly: A first port of call when setting up overseas.
- Who recognised the local traffic startup heroes? The results are in.
- Lonely building your startup? Join The Open Collab and get support.
SHOULD YOU OFFSHORE YOUR COMPANY?
Join us this Friday on LinkedIn Live as we chat with Andrea du Toit from Dommisse Attorneys and Simon Ellis from Jem about Jem’s journey—from starting in South Africa to offshoring for fundraising purposes.
TRENDING NOW
Keeping 2.5M Small Businesses on the Right Side of the Law
In today’s Tuesday Deep Dive, we examine the high costs of compliance for SMEs and ask, shouldn’t we be trying to reduce the cost of doing business…?
SA’s estimated 2.5 to 3.5 million Small and Medium Enterprises (SMEs) employ 60% of the workforce and make up over 90% of formalised businesses, contributing around 34% of the country’s GDP (R2.4 trillion out of SA’s R7 trillion).
At a conservative estimate of 2 million SMEs, each one must be generating an average of R1.2 million per year – about R100k per month. But start factoring in the costs of running a small business, and it’s that clear cash flow must be tight.
Coughing up for legal help
Not least of those expenses is compliance – gotta be sure you’re on the right side of the law, or you can’t do business at all.
Especially when you contract with larger corporations. Problem is the legal help for that gets pretty pricey, pretty quickly.
The legal costs rabbit hole goes quite deep: SMEs must deposit R5’000–R15’000 just to get a lawyer to even look at them. And then drawing up a contract alone be an extra R1’000–R5’000 a pop.
Then comes the pro fees: a Junior Counsel starts at around R900 an hour, with Advocates reaching R5’000 an hour. And most are definitely worth it; it’s just unaffordable to many small businesses.
The local legal AI for the lil guy (and/or gal)...
We’re no strangers to LegalTech (specifically AI) having shared some stories in previous editions like when GPT-4 passed the Bar Exam a mere 3 months after ChatGPT’s launch, or when Bowmans became the first law firm in Africa to integrate the Generative AI platform “Harvey” into its operations…
But these are international solutions, so when we stumbled upon Lawyered Up, a home-grown startup building AI-powered solutions to simplify legal processes for SMEs, we got pretty excited to chat with Serisha Barrat, Lawyered Up’s Co-Founder, about what they’re building….
Lawyered Up automates the document lifecycle with generative AI and natural language processing, and users can sign, store, share, track changes, and interact with documents. It can ask clauses in a document questions in African languages, before generating the final document in English.
Documents can be downloaded in Word or PDF or sent via an in-platform link that does not require the recipient to sign up to Lawyered Up. Handy.
And the platform is currently operational in South Africa, Kenya, Botswana, and Nigeria. With a 70% female-led team with pan-African expertise. Noice.
Plus: They also offer a white-label version for larger corporations that integrate directly into their existing infrastructure. Smart.
But AI in the legal space has not been without pain
In Jan this year, a local law firm found itself in hot water after it used “non-existent legal citations”, obviously generated by a hallucinating AI.
So how does Lawyered Up ensure this doesn’t happen?
One of their measures is employing a Head of Legal in every jurisdiction they operate in to oversee and create documents first and use those to train the AI. The aim is that, over time, the platform should get better and better.
With AI all the rage, and the Legal industry starting to see the potential of what AI tools like Lawyered Up can do, we’re watching this space…
IN SHORT
Strike up a conversation…
🤓 Smart-Geyser Tech Boost. Local IoT for Insurance startup Sensor Networks has locked in a partnership with the world’s largest geyser manufacturer Ariston to bring smart water heating solutions to South African households. We love seeing local tech proudly flying the flag.
🥸 Going Social IRL. Former Twitter Co-Founder Ev Williams is working on a new social media app called Mozi, an app that encourages more in-person meetups by letting you know when you’re in the same city (and event) as a contact in your phone. There’s sometimes a reason you don't want people knowing you’re in the same city, you know…
🤔 Dash Cam Crack Down. Jozi could be introducing a number of new bylaws for drivers with dashcams. This comes in the wake of the newly promulgated by-law regulating the use of private CCTV cameras in Johannesburg. How else we gon’ get epic local pedestrian and cyclist fails now?
🧐 Revolut Rumours Swirling. UK-based FinTech Revolut is rumoured to be setting up ops on local shores. It’s reportedly applied for a full banking license which would make it one of a handful of digital-first banks with full banking status in SA, and comes off the back of a key recent local hire… Hmmm, very interesting…
😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with fractional CTO and tech scaling with Octoco, easy-peasy cloud-based accounting software from Xero and 12 more vital startup tools & services.
CHECK THIS OUT
10 Things You Need To Know About the Isle of Man — Our Latest Partner
Apart from the financial and tax perks, of course…
Many companies looking to expand globally make the Isle of Man their first port of call, mainly due to its reputation as a business-friendly jurisdiction with low corporate tax rates, a supportive regulatory environment, and a stable political and economic landscape. They champion founders of all kinds, and that’s why they have partnered with us in our mission.
But did you know…?
1. The Isle of Man is not a Channel Island. It’s an island in the Irish Sea, situated between Ireland, Scotland and England. At 574 square kilometres, it has a much larger land mass than the Channel Islands of Jersey (120 km2 ) and Guernsey (62 km2 ).
2. In addition to being a tax-neutral Financial Centre of Excellence, the entire Isle of Man is a designated UNESCO Biosphere, recognising its commitment to sustainable development and environmental protection.
3. The Isle of Man is home to the world’s oldest continuous parliament, the Tynwald, which has been running since circa 979 AD.
4. It was the first nation to grant women the right to vote, doing so in 1881, well ahead of many larger democracies.
5. A significant number of South Africans call the Isle of Man home, and around 35 South African businesses have an established presence on the island.
6. Corlett Drive in Johannesburg was named after D.F. Corlett, a builder from the Isle of Man who emigrated to South Africa in the late 1800s. He later served as Mayor of Johannesburg in 1931.
7. The Isle of Man champions innovation and sustainability, hosting the Innovation Challenge every year, focusing on Data, AI, Clean Tech, and FinTech. Last year, South African Cindy van Niekerk won the FinTech category!
8. The Isle of Man is home to the second-largest aircraft registry in the EU, making it a key hub for international aviation.
9. Since 1907, the Isle of Man has hosted the legendary TT Races — a unique motorcycle time trial on public roads that loops through breathtaking countryside and town streets.
10. Famous Manx natives include cycling legend Sir Mark Cavendish and the Bee Gees, who were born and raised on the island.
Discover the Isle of Man for yourself
BUILDING TOGETHER
Happening over at The Open Collab
In the last few days alone, in our online community, we…
- Got some valuable early-stage validation insights 🚀
- Found a handy tool to help SMEs get paid faster.
- Helped Carlos get some insights into company structure outside of SA.
- Helped Justin build out his new startup idea.
- Helped Elijah and Danei pick a lekker newsletter name.
- Welcomed some awesome new members 🕺🪩💃.
Plus: Had a killer in-person event in Stellenbosch last week…
Thinking about joining The Open Collab?
- Supercharge your network in the SA startup landscape — get that introduction, get that customer, or meet that partner.
- Get feedback on your products, services and/or offers from others who have built and are building their own products right now.
- Join all our online and in-person events for free!
- Exclusive 1-on-1 sessions with startup consultants.
SA’s only dedicated tech startup and scale-up founder community.
WHAT YOU SAID
For the robots…
Last Friday, we riddled you about an SA startup helping manage your city’s traffic light maintenance and traffic flow, and only a few recognised Quebit…
🟨🟨🟨🟨🟨🟨 🚦 Robo-T (48%)
🟩⬜️⬜️⬜️⬜️⬜️ 👮♀️ Quebit (12%)
🟨⬜️⬜️⬜️⬜️⬜️ 🚐 MzansiBot (12%)
🟨🟨🟨⬜️⬜️⬜️ 🛣️ VirKeer (28%)
Your 2 cents…
So here we are messaging Beehive about adding a leaderboard functionality, Elijah 💬. Great idea, though, could be fun 🤗.
BEFORE YOU GO
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Until next time,
Elvorne, Renier & Jason
