MarketForce, a Kenyan B2B e-commerce startup, has closed three of its five African regions and is launching a social commerce spinoff.
RejaReja, MarketForce’s super-app that allows mom-and-pop stores to order FMCGs directly from distributors and manufacturers and access financing, will only be available in Uganda after the company discontinued it in Kenya, Nigeria, Rwanda, and Tanzania, TechCrunch reports.
Tesh Mbaabu, who will serve as MarketForce and Chpter co-founder and CEO, told TechCrunch that Kenya will remain the company’s headquarters and launchpad for Chpter. This social commerce spinoff will help merchants “turn conversations on their social media channels into more sales.”
MarketForce slowed last year as some VCs abandoned their Series A investment commitments, causing the business to cut down operations and lay off multiple times. The liquidity crisis occurred during the global venture capital pause, which made fundraising difficult.
MarketForce and other firms have had to forego growth-at-all-costs to pursue profitability, bridge rounds, or lower valuations due to capital constraints and market realities. MarketForce raised $1 million via crowdsourcing.
In a previous TechCrunch interview, Mbaabu claimed his company focuses on developing a successful business by delivering in high-demand locations and closing unprofitable routes. With its asset-heavy approach being capital expensive and growing liabilities, the company had no choice but to close in the three regions.
After we chose to pursue profitability, Uganda has been our best market. We will keep it operational since we have exclusive distribution relationships with four big manufacturers and superior margins, allowing us to conduct a gross profitable company there, said Mbaabu.
The recent moves have promoted Uganda country manager Dennis Nyunyuzi to managing director, who will oversee RejaReja’s activities, according to an investor update reviewed by TechCrunch.
MarketForce released RejaReja, a SaaS retail platform for formal markets, in 2020. Informal merchants and mom-and-pop stores can order items directly from manufacturers and distributors for next-day delivery. It also provides loans based on transaction history. The business addressed stockouts, profit volatility, and lack of capital to develop this retail sector.
MarketForce planned to tap the informal retail sector, which accounts for about 80% of household trade in sub-Saharan Africa. Still, Mbaabu says margins are low in expensive markets like Kenya and Nigeria, where competition is intense.
“We are finding more profitable and high margin segments, so we decided to enter social commerce,” said Mbaabu.
