B2B e-commerce company in Kenya market force has ceased operations in three of its five African markets and is in the early stages of launching a social commerce spinout.
TechCrunch reports that MarketForce’s super app RejaReja allows informal retailers to order and finance fast-moving consumer goods (FMCG) directly from distributors and manufacturers. I learned that after the service ends, it will only be available in Uganda. The service has been discontinued in Kenya, Nigeria, Rwanda, and Tanzania.
However, Kenya will continue to serve as the company’s headquarters and Chpter’s launch pad. Chpter is a social commerce spinout that MarketForce is building to enable retailers to “turn conversations on social media channels into more sales,” says Tesh Mbaabu. The co-founder and CEO of MarketForce and Chpter told TechCrunch while confirming the changes.
MarketForce’s slowdown began last year when some VCs reneged on their Series A funding commitments, forcing the company to downsize its operations and make multiple layoffs. The funding shortfall comes amid a global venture capital downtime, making it difficult to raise capital.
Lack of funding and current market realities are forcing companies like Market Force to forego growth at all costs and instead pursue a path to profitability, pursue bridge rounds, and lower valuations. They are forced to raise funds with a certain amount. MarketForce recently raised $1 million through crowdfunding.
In a previous conversation with TechCrunch, Mbaab said the company is refocusing resources on building a profitable business by delivering in areas with high demand density and closing less profitable routes. he said. But its asset-focused model is capital-intensive, and the company has run out of options and decided to close stores in three markets, as it has to contend with mounting debt.
“Uganda has been our highest performing market since we decided to take the path to profitability. We have exclusive distributorship agreements with four major manufacturers and The ratio is good and we are able to operate with a gross profit. That is why we will continue our activities,” said Mbabu.
Following the latest changes, Uganda country manager Dennis Nyunuji has been promoted to the position of managing director and given responsibility for leading Leja Leja’s operations, according to the latest information shared with investors seen by TechCrunch. I will be liable.
RejaReja Retail Marketplace is the brainchild of MarketForce and launched in 2020 as a SaaS product for formal markets. This allows informal traders and independent shops to order goods directly from manufacturers and distributors and receive next-day delivery. You can also get a loan based on your transaction history. The company was trying to solve challenges faced by retailers, such as out-of-stocks, unstable revenue, and lack of funds to expand trade.
However, Market Force had planned to tap the continent’s informal retail sector, which accounts for about 80% of household transactions in sub-Saharan Africa, but has been forced to downsize due to low profit margins in markets such as Kenya and Nigeria. Mbabu says he was forced to do so. This is an area where service provision is expensive and competition is fierce.
“We are looking for more profitable and high-margin segments and that is why we decided to enter social commerce,” Mbabu said.