Kenyan B2B Ecommerce Company market force has closed operations in three of its five markets in Africa and is in the early stages of launching a social commerce company.
TechCrunch has learned that MarketForce’s super app called RejaReja, which allows informal retailers (mom and pop stores) to order fast-moving consumer goods (FMCG) directly from distributors and manufacturers and access financing, will only be available in Uganda after that the company discontinued the offer in Kenya, Nigeria, Rwanda and Tanzania.
However, Kenya will continue to serve as the company’s headquarters and launch pad for Chpter, a social commerce spin-off that MarketForce has been building to enable merchants to “turn conversations on their social media channels into more sales,” Tesh Mbaabu, who will also serve as co-founder and CEO of MarketForce and Chpter, told TechCrunch while confirming the changes.
MarketForce’s downturn began last year when some venture capitalists defaulted on their Series A funding commitments, forcing the company to scale back operations and conduct multiple rounds of layoffs. The liquidity crisis came amid a decline in global venture capital that has made it difficult to obtain financing.
The liquidity crisis and current market realities have forced companies like MarketForce to abandon growth at all costs and instead seek paths to profitability, drive bridge rounds, or raise financing at lower valuations. MarketForce recently raised $1 million through crowdfunding.
Mbaabu said in a previous conversation with TechCrunch that his company is reorienting its resources to build a profitable business by delivering to areas with strong demand density and closing routes that are not profitable. However, since its asset-heavy model is capital-intensive and has to deal with mounting liabilities, the company ran out of options and decided to close its businesses in all three markets.
“After we decided to move towards profitability, Uganda has been our best performing market. We have exclusive distribution contracts with four major manufacturers and the margins are better, allowing us to run a profitable gross operation there; That is why we will keep it active,” Mbaabu said.
Following the latest changes, Uganda country director Dennis Nyunyuzi has been promoted to the role of CEO and will be responsible for leading RejaReja’s operations, according to an update shared with investors and seen by TechCrunch.
The RejaReja retail marketplace was launched in 2020 as a brainchild of MarketForce and as a SaaS product for formal marketplaces. It allows informal traders or mom-and-pop shops to order products directly from manufacturers and distributors for next-day delivery. It also gives them access to financing based on their transaction history. The company was trying to solve the challenges faced by these retailers, such as stockouts, instability of profits and lack of financing to expand their trade.
However, while MarketForce planned to tap into the informal retail sector on the continent, which accounts for around 80% of domestic trade in sub-Saharan Africa, Mbaabu says they have been forced to scale back as margins are low in markets such as Kenya and Nigeria. whose services are expensive and where competition is tougher.
“We are discovering more profitable and high-margin segments and that is why we decided to take a step towards social commerce,” Mbaabu said.
