ARC

I am not working based on a legacy employment contract that includes pension, taxes and insurance management by the payroll department. I work as an independent person. I also got admitted to do my master last year in Spain and got rejected in my loan application for the second year running. Same as Dennis in Kenya. The marginalization and unease that freelancers face when accessing traditional financial services especially in developing countries is a very big and growing problem. ARC intends to build a custom financial services company for self-employed, independent contractors, freelancers and gig workers especially in developing countries. As remote work changes the employment stack, tailored digital financial services need to be placed at the hands of this niche of workers to improve their financial stability and accessibility.

Every “non-legacy” worker that we have spoken to has made a point for one or more of our services that they would need. It could be funds transfer, benefits, book-keeping or loans.  International remote workers expressed their frustrations on delays in accessing funds. Some talked about lack of financial protection. Others about FX fluctuations. In Nigeria alone, we can estimate that there are about 1m primary freelancers and 1m secondary freelancers with full-time jobs. We spoke to contacts across Africa and India working via CrossOver, a top remote placement company, and the issues are the same. We estimate that at least 10m and 15m people in Africa and India respectively have this problem. About 100m people in middle east and Europe have this problem. Moreover, as the remote transition heightens and more people convert to gig work, this numbers would see significant growth.

“Non-legacy” employees. These includes local and international remote workers, self-employed people, independent contractors and gig workers are our niche. They fall under 4 spectrums which are transportation services e.g. Uber drivers, IT and professional services e.g. web design and programming, handmade goods, household and miscellaneous services e.g. plumbers, and asset-sharing e.g. AirBnB. The roles are majorly business support e.g. sales and customer services, content and art related e.g. translation, language teachers, IT e.g. designers, transport services i.e. e-rides.

This niche has a difficult time accessing custom financial services. The most crypto users are in developing nations and are majorly foreign tech remote workers because it is already popular in tech and they can easily convert to cash via P2P. However, those who do not have a trusted peer may be defrauded. Getting paid in any currency and making it easily accessible instantly to the user at the local area is the ultimate insight to capture the funds market.  Also, the pandemic reality and lifestyle needs of this niche means that they need insurance and pension to manage their financial risks as a cost of independence.

We believe that as the future of work expands, identity verification would also become a priority to clients to determine the legitimacy of the contractors. A solution  may be to have a verification from their salary account provider to ascertain their history or KYC profile to certify them. This would also be applicable to us to factor in tax brackets and loans to freelancers.

Freelancing and remote work is difficult work and we are providing a tool to help the users outsource financial HR. This problem we are solving always end up causing severe implications for the niche if not properly managed. The percentage of those that can individually manage this problems independently is meagre. Hence, ARC. the crucial debate here is that India and Indonesia has a high percentage of people involved in this space because it gives a new voice to the modern, hard-working youths from different aspects of this society. High level of unemployment, job-hopping and entrepreneurship due to COVID has crept a new work culture in the highly educated youth seeking versatility and an independent lifestyle. Freelancing is expected to grow to $20-30bn by 2025 in India. India alone has 15m freelancers across tech and miscellaneous services and 1 in 4 freelancers in the world come from India. A lot of highly skilled corporate professionals are also switching to grow professionally in a challenging work environment, get rich and become independent adds to the allure of freelancing created by the youth who are already pace-setters in starting careers via freelancing. The summary of this is that freelancing and remote work is here to stay and get more new entrants in India.

The goal of ARC is to become a financial partner in there activities to take their mind of the stress of financial administration.

Adetunji Tobi

The main differentiator is the defragmentation and differentiation focus of the market. The differentiation focus is the niche we are focused on is relatively new but booming niche. Defragmentation is the bundling of these solutions identified by users into a product. In fact, we only have two competitors globally who are also seed/pre-seed stage startups. Our product and product roadmap is still significantly more custom, especially in the benefits section presently. Our payment style is also a multi-currency "income" wallet that allows them get paid digitally.

The disruptive scale strategy is to target communities and platforms that are players in these niche for cheap customer acquisition. Tech communities and platforms, ride-hailing, service providers digital platforms would be targeted for these. We intend to be familiar with the user right from their integration into this market and the entry point are usually through online/offline communities and platforms.

Familiarity with the client base would lead to an emotional hook on the issuer by ingraining so much engagement and visibility with the user that they'll see no alternatives or competitors.  

Our technology is a digital wallet that receives cryptocurrency and digital fiat. We are bridging a blockchain infra for stable coins only. We are also working on a Mastercard payment facilitation license to checkout invoices sent to the user's client for payment. The tech stack is Reactjs and solidity.

The benefits product is a smart contract that allows the users to set instructions on premium remittance from the income wallet. This is built with solidity. 

The bookkeping calculates taxes based on KYC location, and a template for pay slip generation.

Goal 3 - Good Health and Well Being: Freelancers are the most financial unstable set of workers even though they earn more. In fact, a research conducted concluded that freelancers have no way to meet unexpected $1000 expenses. Our benefits product would solve this by providing universal health coverage and loans (Year 3 goal) to meet non-health related bills.

Goal 8 – Decent work and economic growth: Our tool is an aid to make people diversify to a more flexible and more open way to drive economic productivity through adoption of work in those niche. India has exported tech work and has a well-documented sustainable economic growth profile to show for it. The more countries that commit to these employment stack, the more people will have decent jobs and hence widespread economic prosperity. The most impactful way to do this is through training and exposure of the youth, hence partnership with platforms and communities.

Goal 10 – Reduced inequality: We have an opportunity to put our users before a global audience for employment and this would lead to reduced income inequality, more access to equal global and digitally created opportunities, while also promoting economic inclusion for our niche.  

Our current goal is to launch the product in Q2 2022 while expanding the number of platforms and communities we have partnered with.  

The goal is to cover freelancer financial services in the EMEA, SE Asia and LatAm. If we can become the market leader in one of this regions in the next two years, that outcome would set us up for that vision.

Our product roadmap will include open banking, lending and Edtech for users, VC and hiring administration for hiring businesses. Each of these would be added in each quarter from Q1 2023 upwards.

In five years, we expect that the employment stack will be skewed towards internet based, and we would have a stronger brand positioning towards the next billion users in terms of overall financial services and identity.

We would achieve this by ingraining values and messaging of the niche and only hiring fanatics. The company itself would operate in units and would be remote but operates with a central structure.

Number of payments 

Number of policies

Number of claims paid

Number of gigs started or job placements

Regulatory, compliance and government relations (policy): We intend to be global and as such the different global policies regarding employment and payments.

Payment facilitation: We need a payment facilitation partnership with Mastercard to process digital fiat payments from clients to contractors.

Claims handling: We do not have the capital base to pay huge claims or data to understand claims frequency. 

Regulatory, compliance and government relations (policy): Working in units and relationships with CPAs as local financial entities would works.

Benefits claims management: A partnership with AXA Mansard would give us the backbone to handle liability to claims.

Payments facilitation: A warm intro to the right person would work.

8. While we are all employed, we have full commitment to building this project.

The product team consists of either freelancers, remote worker or people who have ran a freelancing ecosystem. The team lead is a product designer who founded and runs a startup for requesting trade services so proximity to the tech and household/miscellaneous services industry gave access to insight on the needs of the market.

The business team consists of an accountant with audit and taxation focus with 10+ years experience, a CFA charter holder for investments with 10+ years in traditional benefits companies, an insurance underwriting for pricing and a legal counsel.

Our mix of skills complements to form a structured team to deliver on the product promises.

To be honest, while we are all Nigerians on this team, we have found convincing women to commit to this project a little difficult and as we are quite early stage, we have filled all responsibilities. However, we hope that when we niche our presence and have more visibility, we would have more female country managers.

None.

Our greatest value is the flexibility and sustainability focus of our product. Due to the pandemic, employment are more flexible and digital and hence our product handles the financial HR stack for  the independent and decentralized workforce. The way we work is changing and so therefore, the way we handle financial HR needs a pivot, which is where ARC comes in. The product ensures that the new stack of workers get even better flexibility and exposure to receive payments from anywhere, get covered from financial worries and losses, while never having to worry to about book keeping.

Our tax withholding strategy would allow local CPAs to file taxes on behalf of the users with the authorities.

1. Publicity: Winning this grant would enable us get the attention of the intended ecosystem that has the highest freelancers and remote workers growth rate and proportions in the world. It would literally be free advertisement as MIT solve is a prestigious program that would allow us get visibility.

2. Funding: We have built our prototype and team out of pocket and meet potential users who showed enthusiasm to use our product. The funds would allow us build faster.

3. Community: The funding comes with mentorship and advisory from experts who can guide our strategy from experience and networking.

1. Business Model: We want to establish a network of CPAs globally who would file taxes for the users locally for a fee. 

2. Legal and regulatory matters: We intend to be global in a very regulated space, therefore we need regulatory experts to guide with compliance.

3. Public relations: Our messaging is intended for a particular niche and we would schedule media events to reflect this. This would range from podcasts, challenges etc. We would like to find guidance to doing this globally for different sub-niches.

Product or service distribution: Freelancing is global and evolving. We intend to make a play in hiring administration to lockdown the market to pass through us.