Kenyan B2B e-commerce firm MarketForce it has closed operations in three of its 5 markets in Africa and is within the early levels of launching a social commerce spinout.
RockedBuzz has realized that MarketForce’s super-app referred to as RejaReja, which permits casual retailers (mom-and-pop retailers) to order fast-moving client items (FMCG) immediately from distributors and producers and entry financing, will likely be accessible in Uganda solely after the corporate stopped providing it in Kenya, Nigeria, Rwanda and Tanzania.
However, Kenya will proceed to function the corporate’s headquarters and launch pad for Chapter, a social commerce spinout that MarketForce created to allow retailers to “flip conversations on their social media channels into extra gross sales,” Tesh Mbaabu, who will double as co-founder and CEO of MarketForce and Chapterer, advised RockedBuzz confirming the adjustments.
MarketForce’s deceleration started final yr when some VCs reneged on their Series A funding commitments, forcing the corporate to cut back operations and conduct a number of rounds of layoffs. The liquidity disaster occurred within the context of a interval of world enterprise capital inactivity that made elevating financing tough.
MarketForce tightens its belt as robust instances hit B2B commerce
The liquidity disaster and present market realities have compelled corporations like MarketForce to abandon development in any respect prices and as a substitute pursue paths to profitability, pushing for transition rounds or elevating funding at decrease valuations. MarketForce not too long ago raised $1 million by way of crowdfunding.
Mbaabu stated in an earlier dialog with RockedBuzz that his firm is refocusing its assets to construct a worthwhile enterprise by delivering to areas with excessive demand density and shutting routes that aren’t worthwhile. However, as a result of their asset-intensive mannequin was capital-intensive and confronted with mounting liabilities, the corporate ran out of choices and determined to shut its doorways within the three markets.
“After deciding to embark on a path to profitability, Uganda has been our best performing market. We have exclusive distribution contracts with four major manufacturers and the margins are better, which allows us to run a gross and profitable operation there; that is why we will keep it active,” Mbaabu stated.
Following the newest adjustments, Uganda nation supervisor Dennis Nyunyuzi has been promoted to the place of CEO and will likely be answerable for main RejaReja’s operations, in accordance to an replace shared with traders and seen by RockedBuzz.
The RejaReja retail market was launched in 2020 because the brainchild of MarketForce and as a SaaS product for formal marketplaces. It permits casual merchants or mom-and-pop retailers to order items immediately from producers and distributors for next-day supply. It additionally offers them entry to financing based mostly on their transaction historical past. The firm was making an attempt to resolve the challenges these retailers face, similar to stock-outs, earnings instability and lack of financing to broaden their enterprise.
However, whereas MarketForce deliberate to faucet the continent’s casual retail sector, which accounts for round 80% of home commerce in sub-Saharan Africa, Mbaabu says it has been compelled to cut back as margins are low in markets similar to Kenya and Nigeria, that are costly to serve and the place competitors is hardest.
“We are identifying more profitable and high-margin segments and that is why we decided to move into social commerce,” Mbaabu stated.
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