🚀 SA's Brighter Fin Future...
Healthier 2025? STEM researchers have been busy over the holidays, announcing some medical breakthroughs in blood-based implants that heal bone faster and even 3D-printed organs grown inside a human body for space-age healing like RoboCop. Aitsa.
In this Open Letter:
Smart investments: Helping more South Africans build wealth.
SA’s Chinese EV boost, AI for your TV & child maintenance tracking.
Cheat codes: How successful founders build businesses that last.
Which startup sectors will rule in 2025: The results are in.
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TRENDING NOW
A Startup Boosting More Young South Africans to “Wealthy” Status
South Africa has one of the lowest national savings rates (the amount of households, businesses, and governments that save money rather than spend everything) in the world. We save on average an abysmal 0.5% of income, well below that of places like Brazil (at 16.9%), the US (12.4%), and India (just under 11%).
At a household level, 76% of South Africans run out of money before month-end, with an average of 62% of their take-home pay going towards debt repayments.
Additionally, most people don’t start thinking about retirement or long-term saving until they’re 40+, with nearly 60% of South Africans believing that long-term & retirement savings and investments are unaffordable.
And by the time we reach retirement age, only 6% of us are on track to retire comfortably.
It’s a major challenge not often spoken about, and today, we feature a local startup building to solve this. More on this later…
Why saving matters
As a country, individual savings are quite helpful for several reasons which include:
Lowers people’s over-indebtedness, which improves financial well-being and reduces risk in the financial system.
People who cannot afford to retire, cannot buy stuff and do not contribute to the economy, which holds back economic growth.
Without savings for retirement, more people will become dependent on SA’s already buckling grant system (28 million grant recipients vs 7.4 million income taxpayers).
Grandpa looking at all of those Christmas prezzies under the tree like…
Untaxing the savers…
As a measure to try and encourage households to save more, the SA government introduced legislation for tax-free savings accounts (TFSAs) back in March 2015.
It’s worked well elsewhere. In 1999, the UK introduced a similar ax-exempt Individual Savings Account (ISA). Over the last twenty-odd years, 20 million Adult ISA accounts have been opened, and they now hold a combined market value of £620 billion.
What benefit is there in a South African TFSA? Well, buying shares in listed companies requires tax returns for any returns those shares deliver. For example, when there is a dividend (you make some money), it's a taxation event (you get taxed on it and have to pay SARS some of your earnings if they go above the annual threshold… yes, it’s complicated).
Normally, this tax can range between 10% and 37%, so getting it tax-free annually, forever, is quite a saving.
Sounds like a great deal. Well, there is a slight catch:
You can only invest a total of R500k in your lifetime.
And you can only invest up to R36’000 per year (which means it will take you 14 odd years to max it out).
Finally, if you withdraw from it, you will not get your allocation back. If you cap it out at R500k and withdraw, say, R300k, you will not be allowed to add anything more to it — only that which is left will stay.
Off to a slow start…
Official stats on the uptake of TFSAs since 2015 are somewhat inconsistent, but some sectors of the industry have suggested it has been “sluggish.”
The reasons for sluggish uptake aren’t clear, it is likely a combination of not having the funds to do it, not understanding the benefits of it or simply that most financial advisors are heavily incentivised to sell certain products, and with an R36k a year cap on your investment into TFSA, it’s not really a money spinner for them (remember, they work on commission for the products they sell – we wrote about it in this Open Letter from last year).
The local startup making saving easy
If financial advisors aren’t going to make enough money to promote the product, a platform could be a game-changer, not only for the business but also for the good of SA consumers.
And that’s what the team at Fynbos Money is building.
Fynbos Money is a local investment platform that wants to make it easy to just get going with long-term savings and investments. Their main objective is to get young South Africans into savings.
First, by helping you get an emergency savings account up (if you have one, you can skip theirs) and then get into a Tax-Free Savings Account. It’s all automated, your monthly debit order keeps your emergency savings topped up while also maximising your annual TFSA benefit. And as a customer, you can select funds from top-tier TFSA such as Allan Gray, FNB, Sygnia, 10x, 1nvest, and Satrix.
We spoke to Fynbos Money Founder Adrian Hope-Bailie recently, and they’ve got a big 2025 planned, including the launch of their paid “Protea” tier, which is a complete savings and investment portfolio management product in one place for a single monthly subscription.
With more flat-fee and subscription-based financial service providers popping up to take on the old-school financial behemoths by offering transparent, simplistic financial products for a tech-savvy generation, we’re watching this space…
CHECK THIS OUT
Building a Business That Thrives Beyond the 5-Year Mark
In South Africa, research from the University of the Western Cape shows that 70% to 80% of small businesses don’t survive beyond five years.
The good news? Those who succeed often share a common trait — a strong grasp of their finances.
It’s not just about numbers. It’s about planning ahead, knowing when to push for growth, and preparing for the challenges that come with it.
Backing Yourself & Your Team
Whether it’s managing cash flow, securing funding, or staying on top of tax deadlines, having a clear financial strategy can make all the difference.
“As businesses grow, things naturally get more complicated,” says Etienne Raubenheimer, Head of CFO Services at Outsourced CFO. “The right financial guidance doesn’t just help you survive tough times — it helps you spot opportunities and grow smarter.”
That’s why all the most successful companies have top-tier CFOs.
CFO expertise is so sought-after, in fact, few startups can afford to employ one full-time… And that’s why there’s Outsourced CFO, a fractional CFO service that gives you a top-shelf CFO, as and when you need them, at a fraction of the cost.
Getting CFO insights as a startup is one of the best ways to ensure your business not only survives but thrives past the 5-year mark and beyond.
IN SHORT
Start the year a little smarter…
⚖️ Tipping the Scales. Local startup Social Justice has launched the “Coparent App” for separated parents with customisable contact schedules, instant messaging with a language filter, secure document storage, and monthly maintenance obligations tracker (housing, food, clothing, education and medical care). Probably going to save divorcees several awkward conversations.
📺 AI.TV. Samsung has launched an AI offering for its premium line of TVs. Called Vision AI, Samsung’s AI-powered screens can now search the internet for information on what's on the screen — like a specific actor, or product, as well as real-time translations and personalised background images. No more “what movie is that guy in again” convos.
📚 AI Africa Rising. The University of the Witwatersrand (Wits) has launched a new AI institute to focus on fundamental AI research that’ll drive scientific discoveries and grow Africa’s AI expertise called the Machine Intelligence and Neural Discovery (MIND) Institute. Nice to see SA pushing to lead in the AI conversation.
🚙 Powering SA’s EV Scene. SA’s automotive industry could see a boost in EV investment after President Ramaphosa signed a tax break into law recently. Three Chinese automakers are already in talks with SA’s Automotive Business Council to bring electric- and hydrogen-powered vehicle production to local shores. Seems like the stars are aligning for a big shift to EVs locally.
🤖 Going Big on Bots. Global leader in AI chip development, Nvidia, is apparently turning its attention to robotics as a future area of growth after seeing a flood of new competition in the once lucrative AI chip business. The intersection between AI and robotics will certainly give them an edge.
😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with your own CTO for remarkable tech builds with Octoco, all your accounting sorted with Xero and 12 more vital startup tools & services.
BUILDING TOGETHER
Happening over at The Open Collab
Well, most of us took a break over the holidays, but, you know, hustlers still be hustlin’ rain or shine…
Speculated on Tyme Group’s $250M raise to tackle the South-East Asian market — threatening to become a bigger banking story than Capitec 👀
Started the holidays strong with special startup book deliveries for new members.
Learnt we are getting our first live and in-person Masterclass session in February 🤯🤩🔥
Voted on whether we want normal online Office Hours this week — or in-person coffees together in JHB, Cape Town and Stellenbosch.
Celebrated The Open Letter’s 400%-plus growth in 2024 (hitting over 16k subs over the break) and looking forward to more awesomeness in 2025!
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HAPPENING SOON
Upcoming Events
17 January 2025 — Sales Masterclass — Online: Come learn and ask questions directly to pros — exclusive to members of The Open Collab community.
24 November 2025 — Offshoring Case Study — AMA: Get firsthand insights into what it takes to take your company global from SA — exclusive to members of The Open Collab community.
31 January 2025 — Fundraising 101 — AMA: We’ve invited founders and teams who’ve recently raised funding to give you the ins and outs of securing investment —exclusive to members of The Open Collab community.
View all our upcoming events here.
WHAT YOU SAID
Chasing the big payday…
We asked which startup sectors will drive the biggest exits in 2025, and many lean towards AI…
🟨🟨🟨🟨⬜️⬜️ 🌍 FinTech & Payments (17%)
🟩🟩🟩🟩🟩🟩 🤖 Gotta be AI & Analytics (23%)
⬜️⬜️⬜️⬜️⬜️⬜️ 💼 Must be HR Tech & Workforce Tools (3%)
🟨⬜️⬜️⬜️⬜️⬜️ 🌱 Climate & Sustainability (8%)
🟨🟨🟨🟨⬜️⬜️ 💊 HealthTech & Wellness (15%)
🟨🟨🟨⬜️⬜️⬜️ 📦 E-commerce & Logistics (12%)
⬜️⬜️⬜️⬜️⬜️⬜️ 🎮 Gaming & Entertainment (3%)
🟨🟨⬜️⬜️⬜️⬜️ 🔐 Cybersecurity (9%)
🟨⬜️⬜️⬜️⬜️⬜️ 🚗 Mobility & Transport (6%)
🟨⬜️⬜️⬜️⬜️⬜️ 🎟️ Other – tell us what you think… (4%)
Your 2 cents…
Nice one, Mark! Did you see that time we looked at local startups using AI in the security industry? It’s an exciting space and there’s loads of room for innovation. 🦾
Ho ho, KNT, yeh that’s a big one. Just intelligence to impact the insurance money on cargo alone is probably already big business. 💡