Dear reader,
Welcome to the RO Espresso.
In these Tuesday emails, we pick a common theme we’ve noticed across the startups we cover. We introduce it, unpack it, and give you various founders' takes alongside our own.
Last week, we explored how founders think about raising debt instead of or alongside equity. We learned that debt finances predictability. If a startup has an expected path to revenue and cash flow, owing money isn’t as bad as it sounds. You can read the previous edition here.
This week’s theme is about what happens after raising capital, whatever the form.
We often ask the founders we interview about global incumbents. These questions sound something like: why hasn’t [insert global giant] done this already?
“Why hasn’t Google built this?"
"Isn’t Rippling working on this?"
"Why hasn’t Stripe expanded here?”
Our assumption is: if a market opportunity exists, why can’t an established global company swoop in and outspend its local competitors?
Founders' responses to these questions are some version of:
"Global companies can’t or don't want to climb the localization wall. They’ve either tried and failed. Or they tried, momentarily succeeded, only to retreat."
In this week’s RO Espresso, we cover three startups that have surmounted it.
The localization wall.
The localization wall appears when global companies' “global playbook” doesn’t neatly apply to a local market.
Software companies assume code prevails across borders. In many ways, it does. What doesn’t always prevail is how that code interacts with local norms, institutions, infrastructure.
Some examples.
Payments rely on domestic banking rails. Payroll depends on tax codes that can change on a whim. Consumers prefer cash, and businesses operate in analog manners. Government agencies require physical documentation.
For a global company optimized for standardization, every one of these nuances introduces friction.
Nestled in these frictions are opportunities for local startups.
Cercli (UAE)
Cercli is a UAE-based payroll and HR infrastructure company. While global players like Deel and Rippling offer cross-border solutions, Cercli focused on building a MENA-native compliance engine. Rather than layering global software on local policies, they built their product alongside local customers.
Cercli’s team observed local HR managers as they navigated their payroll procedures. This allowed them to understand the nuances of local operations and build around them.
Akeed Azmi, co-founder and CEO of Cercli, told us that even global players need to build local understanding from scratch:
“A company being global in nature doesn’t mean it always wins. Uber was a global concept, but Careem scaled in MENA, Grab scaled in SEA. There is plenty of localization that global players simply can’t construct from scratch every time they enter a new market.”
He adds that a payroll company must be constantly aware of local laws:
“Building a payroll product is a never-ending, iterative process. Labor laws change. An employee’s days off need to be reflected in payroll, but a company’s days off policy evolves. There are endless permutations to account for.”
Excerpt from Cercli: digital infrastructure for MENA’s payroll & HR, originally published in The Realistic Optimist.
Barikoi (Bangladesh)
In Bangladesh, locals rarely use street names for navigation. Locations are described relative to public landmarks. Public datasets that track these landmarks are sparse. This creates a problem for companies that rely on mapping data, but an opportunity for local mapping startups.
Barikoi, a Bangladesh-based mapping startup, overcame this problem by localizing navigation.
Tayef Sarker, co-founder of Barikoi, previously co-founded an “Uber for motorcycle taxis.” He wasn’t happy with Google Maps, stating,
“We used Google Maps, but we weren’t satisfied. The level of preciseness simply wasn’t good enough. I wondered if other Bangladeshi startups with mapping needs faced a similar issue. They did. I shadowed a delivery company, and was astonished by the time they wasted looking for houses they were supposed to deliver parcels to.”
This led him to launch Barikoi. The difference between Barikoi and Google Maps was the lens with which they looked at the Bangladesh market.
“Building reliable maps for Bangladesh required significant investments because a company like Google can’t apply a Western lens here. Addresses aren’t organized through names, they are situated in relation to a specific “landmark” (ex: the house is “just behind the big tree”). In the US, the government publishes useful data for map makers. Not so much in Bangladesh. The granular, data collection work has to be done from scratch, by hand.”
To solve this lack of data problem, Barikoi sent people around Dhaka (the capital of Bangladesh) to map out areas. They took pictures, sent them to Barikoi, which were compiled into a comprehensive map. At their peak, they had over 200 people mapping Dhaka.
Excerpt from Barikoi: accurate maps for emerging markets, originally published in The Realistic Optimist (for RO paid subscribers only).
Payze (Georgia)
The Caucasus and Central Asia are fragmented payment markets. Regulations differ between countries, and in Uzbekistan for example, local card networks dominate.
Adding to the operational constraints are data localization laws. For a global incumbent optimized for large, harmonized markets, the region introduces friction.
For these reasons, payment companies like Stripe have not expanded directly into much of the former Soviet Union. This created a market opportunity for local companies like Payze, founded in Georgia and now active in Uzbekistan.
Payze builds software that help multinationals and regional enterprises process payments.
Giorgi Tsurtsumia, co-founder of Payze, explains why Stripe has stayed out:
“I bet that Stripe’s choice not to expand to the Caucasus/Central Asian market is a matter of the hassle not being worth it. For now, at least.”
This “hassle”, as Tsurtsumia points out, is many things. One of them is data localization. Here’s how Payze addresses it,
“Operating in our region does come with its fair share of localized challenges.
For example: we were able to operate in Georgia while running on AWS. That didn’t pose any problem. But in Uzbekistan, the regulator considers card data to be personal data. And that therefore, it has to be hosted on Uzbek servers.
When we launched in Uzbekistan, there was no relevant local, cloud-based solution we could use. So we had to build our own physical data center and infrastructure locally.”
Excerpt from Payze: Stripe for the former Soviet Union, originally published in The Realistic Optimist (for RO paid subscribers only).
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–
Tim (founder) & Aakash (COO)
Disclaimer: Some of the articles quoted above were posted in 2025 and 2024.
While what the interviewee expressed at that time was their current thinking/numbers, it might have changed. We believe their thoughts are valuable nonetheless.