MarketForce is Leaving Three Markets and Getting Ready to launch a social commerce spinout. MarketForce, a Kenyan B2B e-commerce company, has closed its operations in three out of its five African markets and is in the early phases of launching a social commerce spinout.
Kenyan B2B e-commerce company MarketForce has closed its operations in three of its five markets in Africa and is in the early stages of launching a social commerce spinout.
MarketForce is Leaving Three Markets
MarketForce’s super-app, RejaReja, which allows informal retailers to order fast-moving consumer goods directly from distributors and manufacturers and access financing, will now only be available in Uganda. Kenya will remain the company’s headquarters and serve as a launchpad for Chpter, a social commerce spinout aimed at helping merchants convert social media conversations into sales. Tesh Mbaabu, who will be the co-founder and CEO of both MarketForce and Chpter, confirmed these changes.
MarketForce began to slow down last year when certain VCs backed out of their Series A funding commitments, leading the company to reduce operations and carry out several rounds of layoffs. This financial strain occurred during a global venture capital slowdown, making it challenging to secure funding.
The financial strain and current market conditions have compelled companies like MarketForce to shift away from a growth-at-all-costs approach. Instead, they are now pursuing paths to profitability, seeking bridge rounds, or raising funds at lower valuations. Notably, MarketForce recently secured $1 million through crowdfunding.
Mbaabu explained in an earlier conversation with TechCrunch that his company is reallocating resources to establish a profitable business by focusing on high-demand areas and discontinuing unprofitable routes. However, due to their capital-intensive, asset-heavy model and the burden of increasing liabilities, the company exhausted its options and made the decision to cease operations in the three markets.
New Leadership for RejaReja” – Dennis Nyunyuzi Takes the Helm
We opted for a path to profitability, and Uganda has emerged as our top-performing market,” stated Mbaabu. “We hold exclusive distributor agreements with four major manufacturers, resulting in improved margins and allowing us to maintain a gross profit in that region. That’s why we’re keeping it operational,” he added.
After these recent adjustments, Dennis Nyunyuzi, the country manager for Uganda, has been promoted to the position of managing director and will be in charge of overseeing RejaReja’s operations, as per an update provided to investors.
The RejaReja retail marketplace, conceived by MarketForce in 2020, initially served as a SaaS product targeting formal markets. It provided a platform for informal traders, including mom-and-pop shops, to place direct orders with manufacturers and distributors, ensuring next-day delivery. Additionally, it offered them access to financing based on their transaction history. The company aimed to address the challenges faced by these retailers, such as stockouts, income volatility, and the lack of funding to expand their businesses.
However, while MarketForce had plans to tap into the informal retail sector, which constitutes approximately 80% of household trade in sub-Saharan Africa, Mbaabu noted that they’ve had to scale down operations. This decision was prompted by the low profit margins in markets like Kenya and Nigeria, where operating costs are high, and competition is fierce.
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