Alexander O. Onukwue
Founding an African business is a gruelling endeavor that could end in tears. If you are logistics-minded, you are bothered about the aggressive regulatory posturing in Nigeria’s commercial capital. Ride-hailing is a non-starter in Rwanda, and you would want to think hard before starting anything in Cameroon at this volatile moment.
But even when you find the right idea for a country, you may not immediately know how to structure your operations.
How do you hire? Should you constitute a board? When should you raise external funds?
Wossen Ayele and Yacob Berhane, two venture-building consultants formerly based in the US, realised that these questions also bother experienced entrepreneurs.
“We kept seeing gaps in talent and capital for companies struggling to find talent – to help them with their projects – and money to help grow their businesses,” Berhane told TechCabal, of his experience running a startup accelerator focused on African companies.
Their solution is Pariti, a technology platform for providing talent-matching and capital-matching as a service.
Pariti connects freelancers to new African businesses in need of advisory services. Some of those services include product review, staffing, market research and fundraising.
“You shouldn’t be limited to people that are in your close vicinity for talent,” Berhane, Pariti’s CEO, says.
The magic of the global economy is that companies of all sizes at all locations can have access to expansive pools of talent and venture-building resources beyond their shores.
So, how does Pariti work?
On Pariti, you can either sign up as a freelancer, or an investor.
Wossen and Berhane’s team does the job of onboarding a new user by undertaking background vetting. In the case of freelancers, measures are taken to verify competence, antecedence and availability.
The goal is to be able to correctly match freelancer skills with company needs. If a company needs a financial model, it will be matched with people who know how to build financial models. For a full capital raise, Pariti is able to set the ball rolling for a road show by connecting founders to people with fundraising expertise.
Here’s the key insight that motivates this model, according to Ayele, Pariti’s COO:
“There’s execution talent all over the world. If you pair someone who understands the market and the industries that our clients are in, you can actually deliver advisory services on a much more cost effective basis than traditional advisory shops.”
To be sure, many businesses would prefer to be advised by McKinsey-type consultants with global experience. If you have world-conquering ambitions, you want to work with companies whose MBA strategists are credentialed by Harvard, Yale or the London School of Economics.
Traditional advisory services – whether in tax, transactions, risk assessment, or performance improvement – differ in the levels of complexity involved. An invoice from KPMG or PricewaterhouseCoopers could appear expensive. However, there is no rigid billing template for the services they offer; fees are charged on a case-by-case basis, depending on the size of the client’s company and their advisory needs.
A standardised, ‘visible-hand’ process
A special appeal of business advisory is the versatility of the consultants and diverse range of business sectors they advise. Pariti, which only launched in January, is setting up to compete with these traditional shops for Africa’s technology upstarts.
They want to capture the sector, recognising that the likes of Paystack, Swvl and Lori have the potential to dominate African economies and dictate the mood of stock markets from Johannesburg to Lagos in the coming decades.
Do they want to start by focusing on one sector, say fintech, and gradually grow into other sectors? “We are agnostic as far as industry and market; we are more specific to stage,” Berhane clarifies.
Pariti claims to charge about a third of what traditional advisory shops charge. A seed stage company – with about $100,000 in revenue – wouldn’t pay as much as a Series C-stage company that does millions.
To avoid overcharge, they manage the entire engagement, as against simply connecting freelancers and startups. Pariti defines the scope of work so that the case of constantly shifting goalposts doesn’t occur. The freelancer and project owner agree initially on what should be worked on, with Pariti involved in price negotiation.
As at the time of this piece, 35 freelancers have been onboarded on the platform. Besides being a medium for freelancer-startup connection, Pariti is a CRM system for investor needs; for sourcing experts for short-term due diligence or experienced hands who can manage portfolio companies.
From Nairobi to the world
Pariti’s decision to be based in Nairobi is partly due to familiarity and the founders’ family connections. Though he is of Ethiopian descent, Ayele has worked and resided in Nairobi.
Beyond that, Nairobi’s attraction is in its “very unique combination of diverse talent and diverse startups – everything from agriculture to fintech to logistics” Berhane says.
In the long run, their vision will expand beyond the continent. Pariti is, for these founders, a solution for building out density in any startup ecosystem that is not very mature.
They are looking at expanding into Latin America. “We think this [freelancer advisory] model can work across emerging markets and even in more developed markets in North America,” Ayele says.
To power their mission, Pariti is raising an angel round of $250,000 at the moment, with some Japanese investors and high networth individuals from around the world participating. Ayele and Berhane decline to disclose their identities.