Fresh enough? While the US is losing its mind over astounding numbers of UFOs in New Jersey, calling a state of emergency over what’re clearly drones, a group of European scientists have found a way to measure water purity using cyborg clams and oysters. Fun times!

In this Open Letter:

• Prepaid mobility: Getting 3 million South Africans some wheels.

• Techy sangomas, SA’s highest-paid CEOs & Amazon’s local jobs.

• Going global: How to take your SA startup up overseas.

• Which SA startup is real? The people have spoken.

• Short on ideas? Share this and get 100+ SA startup ideas.

Together with:

TRENDING NOW

Getting 3M South Africans Their Pre-Paid Wheels

Getting a new set of wheels in South Africa is painful…

Car prices have climbed faster than inflation in the last 30 years (some say over 744%!), with the average new car price now being R392’174.

The average salary in SA in 2023 was R31’300 before tax (and other deductions)...

And, once Uncle SARS has taken their slice of your salary pie, this comes to around R26k, making a R10k per month car repayment nearly 40% of your take-home. Eeeeeeek…

The motor industry has tried to make it “more affordable” to purchase a car, from balloon payments to payment holidays, and even stretching out the “normal” 5-year/60-month payment terms to 72 months and, more recently, 96 months. 

Not to mention, when someone wants to buy a car, they have to go through the painful process of applying for it, only to have around 70% of applications getting declined…

We work hard for our money.

For most of SA, owning a car is simply not on the table. But that doesn’t mean there aren’t times or extended seasons when you need a car and would happily pay. Think: 

• A contract or work that requires more travelling

• A period where you need a car before relocating

• Extended work in a remote location

• A company you work for provides you with a vehicle without wanting to buy it.

But there’s an interesting trend amongst South Africans. We flippen love prepaid… (thanks Vodacom for introducing the prepaid concept to the world back in 1996)…

The local prepaid wheels player

This is where local startup FlexClub might just be onto something. Founded in 2019, FlexClub initially helped Uber drivers become owners of the cars they drive. However, after learning from this experience, it now offers prepaid mobility to anyone who qualifies, effectively letting users subscribe to use a new car on a month-to-month basis.

FlexClub lets you build a pay-as-you-go car plan: Pick a date of when you want to collect your car, how long you wanna keep it (how many months), choose your car (you’ve got options between R5’600 and R30’900 per month) and how much mileage you intend to put on the car (3’000kms is the standard). And Bob’s your uncle…

Avis supplies their cars, so you know they’re legit, and you have a whole fleet to fall back on.

Ok, but what about services, insurance, and other maintenance work?

Every car in the network is new, so you won’t get one older than 1 year (or with more than 36,000 km on the clock). If your car needs service, simply return it to Avis and swap it out for another one…

What about the excess? 

Don’t worry. Avis fleet insurance covers cars; you're only liable for the excess.

We chatted with FlexClub founder Tinashe Ruzane recently, and they’re seeing an interesting trend where around 20% of their subscribers already have vehicle financing and are using FlexClub’s prepaid subscription model to get a second car for their spouse or a child.

But there’s a little something extra to FlexClub: In addition to their own public-facing brand, FlexClub also offers the solutions as a platform for other businesses called Reflex. This allows other brands (think large insurer, Telco or bank) to launch their own branded pre-paid mobility offering using the same tech that is powering FlexClub.

With car prices soaring, finance terms stretching, and new car features shooting for the moon, could FlexClub change the way we get mobile in South Africa? We’re watching this space.

IN SHORT

A little something for the braai…

🤖 Take a Look Around. Local e-health startup Envisionit Deep AI is collaborating with German multinational pharmaceutical and biotechnology company Bayer to further advance the future of AI-driven medical imaging diagnostics. Nice to see SA startups making strides in biotech.

🦄 We have a unicorn! Tyme Group, owners of Tyme Bank in South Africa and operations in the Philippines, raised US$250 million, the largest fintech raise this year in South-East Asia, valuing the business at US$1.5 billion and giving it a unicorn status. The money will be used to further expand, specifically into Vietnam and Indonesia.

💼 Jobs Jungle. The jobs market is a jungle out there, but Amazon is currently hiring for 93 roles in SA, the bulk of which are in tech-related fields: 30 in Operations, IT, and support, 18 in Software Development, and 2 each in Machine Learning Science, Technical Project/Program/Product Management, and Systems, Quality, and Security Engineering.

🪶 Tradition goes Tech. SA’s traditional healers are using the Ngoma app to deliver services to their clients digitally. The app allows users to book virtual sessions and buy products from vetted traditional healers, allowing more people to access this ancient practice.

🎩 Like a Boss. The CEOs of SA’s top 200 JSE-listed companies have pulled in an average of R250k every day in 2024, according to PwC’s 2024 Directors’ Remuneration and Trends Report. Bob van Dijk, (former Naspers CEO) topped the tables at R330 million for the year, while the lowest-paid CEO struggled to make ends meet at R22.5 million.

🎯 The Stack. Founders need trustworthy tools and suppliers. Our Founder’s Stack includes an easy-to-apply R5M business facility from Lula, next-level authority building with Stream, and loads more vital startup tools and services.

BUILDER’S CORNER

Setting Up Offshore from South Africa

In collaboration with Dommisse Attorneys Inc.

Expanding offshore can feel overwhelming, but with the right approach, it opens up exciting opportunities for your business. We teamed up with the experts at Dommisse Attorneys Inc. to outline the four critical steps to getting it right.

Step 1: Clarify Your Offshore Goals

Offshoring isn’t just about earning foreign currency — it comes with legal and tax implications, including South Africa’s exchange control regulations. Offshore entities must meet requirements like having a “place of effective management” and a “foreign business establishment.” Translation: your offshore company needs real operations and decision-makers to comply and avoid hefty tax consequences.

Be aware of exchange control rules: for instance, licensing intellectual property (IP) to a related offshore entity requires approval, and selling the IP outright is prohibited. While offshoring IP is possible, following the correct steps is essential.

Step 2: Pick the Right Structure

How you structure your offshore entity matters. Here are the two main options:

• Mirror Structure
  OffshoreCo mirrors SACo’s (your South African company’s) shareholding, creating a parallel group structure. A stapling agreement links the entities, ensuring any share movements in SACo are mirrored in OffshoreCo. Investors buy equal shares in both companies and benefit from their respective growth.

• Holding Company Structure
  OffshoreCo becomes SACo’s parent company. Global investors often prefer this structure for its simplicity and familiarity, but it creates a loop structure that demands strict compliance and additional reporting obligations.

Your choice impacts everything from taxes to investor relations. Factors like shareholder numbers or high valuations might make a mirror structure more practical, while others may favour the streamlined benefits of a holding company.

Step 3: Choose the Right Jurisdiction

The location of your offshore company is crucial. Your choice should align with your goals, target markets, and investor expectations.

Popular destinations offer tax efficiency, business-friendly environments, and less red tape. But don’t stop there — some jurisdictions provide specific grants, tax incentives, or strategic benefits tailored to your industry. Consider long-term advantages, compliance costs, and potential risks before settling on a destination.

Step 4: Assemble the Right Team

Success in offshoring depends on your team. Experienced legal and financial advisors are non-negotiable. They’ll guide you through the complexities of compliance, exchange controls, transfer pricing, and ongoing obligations, helping you stay ahead at every step.

If global expansion is on your horizon, reach out to Dommisse Attorneys Inc.

BUILDING TOGETHER

Happening over at The Open Collab

In the last few days alone, in our online community, we…

• Celebrated Carlin and Nathasha becoming the go-to guys for startup info at work!

• Got the inside track on B2B sales from the pros.

• Celebrated Tim’s “paying it forward” programme for NGOs.

• Welcomed a host of new members — so many 🔥 local builders in here.

• Celebrated Elijah and Danei’s road trip to deliver Finmaster orders.

• Did the “who’s on holiday yet” roundup and got some lekker watering-hole leads.

• Celebrated The Open Letter’s 275% growth in 2024 — with a promise of a masterclass coming soon.

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.

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

AI for robots…

Last Friday, we asked if you could spot the real SA startup, and a good few recognised Stellenbosch AI traffic management system Quebit by Bytefuse…

🟨🟨🟨🟨🟨⬜️ 🦓 The first drone delivery service for wildlife medicine was piloted by a Cape Town-based startup. (26%)

🟨🟨🟨⬜️⬜️⬜️ 🤑 A local fintech app is South Africa’s biggest export by revenue. (18%)

🟩🟩🟩🟩🟩⬜️ 🚦 An AI system to optimise a robot’s timing, reduce congestion, and improve traffic management. (26%)

🟨🟨🟨🟨🟨🟨 🚀 A Johannesburg-based company built the first reusable rocket to rival SpaceX. (30%)

Your 2 cents…

Great question, William! Ha ha, yeh apart from managing traffic, the system’s meant to allow authorities to do remote maintenance. So guessing they’re banking on it never going down…? 🤷

Psst, head down to Stellenbosch, Keegan. They are running a pilot, and the numbers look promising. 🏁