Get the sun to shine at night? If you’re looking to get more juice out of solar (or do an insanely awesome party trick), check out this startup working on reflecting sunlight from space onto your chosen destination on Earth at night.

In this Open Letter:

• Ripple effect: Using tech to protect 15M+ SA livelihoods.

• SA’s new AfriLab, Eskom-powered EVS & TymeBank hits Asia.

• Accelerate yourself: Join a leading accelerator program.

• What skills you’d like to learn: The final results are in.

• Startup ideas: Share this 10 times and get Pro membership.

TRENDING NOW

Protecting 15M+ SA Livelihoods

Housing, profit, employment, economic growth… it’s easy to get frustrated with South Africa’s economic performance when you’re out of touch with grassroots level.

Example: Did you know that Stanlib found that 75% of working South Africans live paycheck to paycheck? (Eek, that’s like 15 million people!)

One debt counsellor claims as much as 70% can’t pay their bills on time, while another’s quarterly reports show many households are repaying up to 62% of their income to debt.

And it doesn’t get much better for higher earners – stats show the debt-to-income ratio among many earning over R20k per month is a staggering 127% (meaning if they pay their entire salary, they’re still 27% short on monthly debt repayments).

Where most of the pain is felt

But those are all stats on people who can actually access financial services such as loans. 

For many South Africans, an emergency means getting money through loan sharks or “mashonisas,” who charge interest fees that are upwards of 50%. That’s right, borrow R500 a week before payday, and it’s either you pay them R750 or lose a kneecap. 

And as many as 40% of SA households borrow from these predatory lenders.

The cost of SA’s bad debt

This year, the Reserve Bank estimated that 80% of SA is banked, meaning as much as 20% of South Africans still don’t have access to basic financial services, let alone financial education, which the World Bank’s Global Findex reports show tends to:

• Increase poverty

• Lead to disempowerment (and disenfranchisement)

• Promote a rise in inequality

• Studies even show it directly affects economic growth.

But you can see it even more directly within SA companies, where research by Visa has shown that 84% of employees spend time thinking about their money troubles at work (34% over 4 hours per week), which directly lowers productivity.

By how much? Well, one 2017 Mercer study found at a company with 10k employees, financial stress causes 1’922 hours of lost productivity per week – costing the company R533k every week.

The on-the-ground solution

One of the most promising solutions is Earned Wage Access (EWA), aka On-Demand Pay, which innovates at a specific point of inefficiency in companies – the payday schedule.

Instead of holding employees to a 30-day pay cycle, EWA makes a percentage of the employee’s already-earned wages available to them, negating the need to borrow externally.

This allows the employers to actively:

• Help curb indebtedness among employees

• Control interest rates and repayments

• Improve employees’ financial health

• Use the opportunity to educate employees on finances.

Good for everyone.

Great, so who’s innovating in this space?

Locally, there are a few players in the EWA space, including Floatpays and Paymenow, who both have a dedicated EWA app.

But, we like the way Jem handles its EWA product as a Whatsapp-first solution, i.e. no friction by using an affordable platform the user (employee) is probably already using (it has a 95% adoption rate).

It's way cheaper than anything else workers typically have access to. For example, a R500 advance with Jem costs the user R19, as opposed to R250 from a payday lender – helping people get out of debt.

The service is free for employers, and in addition, it offers these benefits to employers:

• Reduce HR admin hours spent on payday loans (dropped to 0 after EWA)

• Reduce absenteeism and promote financial wellness

• Promote financial literacy (a free WhatsApp-based financial education programme is part of Jem’s EWA offering)

Yes, there’s still a long way to go toward true financial inclusion and empowerment in South Africa. But with innovators like Jem offering tangible no-cost benefits that educate and help curb the debt cycle, there’s reason to get excited. We’re watching this space…

IN SHORT

🌍 African Expansion. Africa’s largest network of innovation and tech hubs, AfriLabs, has added 18 new hubs, bringing its network to just under 500 hubs in 261 cities across the African continent. This includes a hub in a new city in Stellenbosch, South Africa at the Stellenbosch University LaunchLab.

👮‍♀️ Menotté en France. Telegram CEO Pavel Durov was taken into custody at the Paris–Le Bourget Airport over the weekend on “suspicion of failing to take steps to prevent criminal use of Telegram”.

🏄 Indonesian Tyme. SA’s digital bank, TymeBank is further expanding into Southeast Asia with the launch into its 3rd market, Indonesia by the end of this year. This follows its October 2022 launch in the Philippines and its Vietnam launch in January 2024.

⚡️ Eskom’s EVs. Partnering with Gridcars, SA’s power utility Eskom has joined the EV industry with the launch of several new car chargers across SA, as well as procuring 20 electric vehicles for operational use.

💥 Defense Plan. Y Combinator has backed its first defence start-up, Ares Industries. The startup is building low-cost cruise missiles that are compatible with existing launch platforms and could see the US Department of Defense get missiles 10x smaller, and 10 cheaper.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with easy no-code automation with Make and unlimited content to build your brand and authority with Stream.

CHECK THIS OUT

Want to give your startup a boost?

If you answered “yes”, join Founders Foundation NPC's Accelerator Programme in partnership with Outsourced CFO & Investec.

The Accelerator Programme runs from October 2024 to June 2025 and you will learn, among other things:

• Finance Readiness: Create funding opportunities + raise capital.

• Market Readiness: Elevate sales and marketing to get more clients.

The fee? An incredible 90% of the accelerator is donor-sponsored, meaning only a small opt-in fee is required.

If you are a business that has been in operation for at least two years and generates R1 million+ annually, then apply here:

Need more information? Check it out here.

Want to build your startup with a supportive community around you?

In the last 48 hours alone, in our online community, we…

• Welcomed two new founders to our growing community!

• Helped Piet get contacts to finance purchase orders on devices.

• Got some recommendations for podcast guests.

• And more…

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all pro members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

What You Said…

We asked what you’d like to learn, and language lessons rule…

🟩🟩🟩🟩🟩🟩 🥐 A new language (28%)

🟨🟨🟨⬜️⬜️⬜️ 👨🏻‍💻 Coding (15%)

🟨🟨🟨🟨⬜️⬜️ 🤖 AI (20%)

🟨⬜️⬜️⬜️⬜️⬜️ 🎻 How to play a musical instrument (4%)

🟨⬜️⬜️⬜️⬜️⬜️ 📐 Woodworking (9%)

🟨⬜️⬜️⬜️⬜️⬜️ 🔮 How to know what my spouse/partner is thinking (9%)

🟨🟨🟨⬜️⬜️⬜️ 🤪 What’s trending in SA’s startup ecosystem (15%)

Your 2 cents…

He he, glad you enjoyed it — we couldn’t resist. 😂

Yeh, if only such a resource existed. 😎🤏