MarketForce winds down its B2B e-commerce arm

Kenyan B2B e-commerce firm MarketForce is winding down its B2B e-commerce enterprise that served casual retailers (mom-and-pop shops) after a turbulent two-year interval that noticed it scale down operations severely.

The shutdown of the B2B e-commerce arm dubbed RejaReja comes months after MarketForce withdrew the service from all its markets, together with Nigeria and Kenya, save for Uganda.

RejaReja was meant to allow casual retailers to order fast-moving client items (FMCGs) from distributors and producers, fixing a number of challenges encountered by casual retailers equivalent to stockout and financing. {The marketplace}, launched in 2020, hoped to faucet the casual retail sector within the continent, which accounts for about 80% of family commerce in sub-Saharan Africa.

At its peak, it employed greater than 800 individuals and served 270,000 casual retailers. MarketForce had raised $42.5 million, including $40 million debt-equity in a Series A round in 2022 at over $100 million valuation, to gasoline the enterprise.

Nevertheless, a mixture of challenges — together with aggressive enlargement, a capital-intensive enterprise mannequin, razor-thin revenue margins and a funding crunch after an investor reneged on their promise — made the enterprise onerous to maintain, resulting in the closure. Several B2B e-commerce companies in Africa have additionally scaled again operations because the funding crunch persists.

“The B2B distribution business that was RejaReja became unsustainable for a few reasons. Firstly, the retail FMCG market has razor-thin margins, which means that at a unit level, we struggled with profitability. The segment is also highly price elastic, which means the price wars are consistent,” said Tesh Mbaabu, who co-founded MarketForce in 2018 with Mesongo Sibuti.

“After immense efforts to make our business model sustainable, including downsizing the business to extend the runway for as long as possible, we have concluded that it is no longer feasible to keep RejaReja operational.”

Its buyers embody Y Combinator (YC S20), V8 Capital Companions (which led the Sequence A spherical), Ten13 VC, SOSV Choose Fund, VU Enterprise Companions, Vastly Worthwhile Ventures, Uncovered Fund, Mirror Ventures, Greenhouse Capital, Century Oak Capital and Remapped Ventures.

After the shut of RejaReja, MarketForce is launching Chpter, a social commerce spinout that Mbaabu describes as an AI-powered conversational commerce platform that allows retailers to promote on social platforms.