As the e-commerce marketplace expands, new players are stepping in to make it easy for merchants to source products and expand their inventory. This has led to the growth of B2B enablers who go the extra mile to link suppliers with retailers.
MarketForce360 is among the leading pan-African e-commerce marketplaces powering retailers.
In this interview, TechTrendsKE sat down with Tesh Mbaabu, the Co-founder and CEO of MarketForce to get insights into what trading at a pan-African level means for a startup whose potential is immense.
Where is MarketForce headquartered and where else do you have offices?
MarketForce was founded in Kenya by Mesongo Sibuti and I in 2018. We are headquartered in the US and have offices in Kenya, Nigeria, Uganda, Tanzania and Rwanda.
For our readers’ better understanding, who is MarketForce and what exactly does the company do? Kindly explain how RejaReja works.
MarketForce is a technology company that is digitizing the retail distribution of consumer goods and financial services.
We focus on dukas, who use our B2B eCommerce marketplace, RejaReja, to source, order and pay for inventory at any time via interactive mobile channels, and get it delivered directly to their store by the nearest distributor, within hours. This saves store owners time and money that they would have had to spend if they closed shop and went out to look for stock. We also enable them to access financing, collect digital payments and make extra money by reselling digital financial services such as airtime, electricity tokens and bill payments through an app.
On the supplier side, we give FMCG companies access to thousands of informal merchants to advertise (targeted) and sell to. The companies can access aggregated web dashboards, from which they can easily and effectively monitor and analyze their distribution channels across multiple shops and regions, seeing who is buying their product, when are they buying it, where they are buying it, at what price, and what are they buying it in conjunction with. This enables the companies to estimate demand and tailor their sales and distribution channels, marketing efforts and promotions based on real-time market trends and consumer purchasing habits; and to finally tap the potential of the African market, increasing revenue and market share.
RejaReja is the most popular product from MarketForce. How many merchants has the platform onboarded so far?
We have onboarded over 200,000 merchants so far
Are there other products that MarketForce is building for the African/global market? Kindly explain MF1 and any other that’s in the pipeline.
Our start in B2B e-commerce and bill pay services has enabled us to become a trusted financial services provider with our merchants across the 5 countries we operate in. 90%+ of merchants we surveyed indicated an interest in accessing credit. These merchants are savvy micro-entrepreneurs who could grow their businesses but don’t have access to capital to do so. This is why we started with inventory financing for our merchants, or the ability to buy goods now and pay later (BNPL).
Tell us about Africa’s Business Heroes award. What made you apply? How do you think money like this helps local businesses become international?
We applied to ABH because of the opportunity to get the grant and capture the opportunity that lies ahead of us to really create an impact in Africa by increasing financial inclusion and growth of micro-retailers as well as financial access of surrounding community members across all the markets we operate in.
This grant would enable us to continue telling our story and attracting stakeholders to be part of our journey. We are planning to conduct digital and financial literacy training and SME growth programs for at least 5,000 merchants and do youth upskilling and direct employment for at least 1,000 gig workers to give them a chance to earn through our platform in Kenya and beyond.
How can beginner businesses hear about grants like this, what do they need to tap into or who do they need to follow? How did you yourself hear about this?
ABH has done a great job in publicizing this grant opportunity, especially through digital channels. We saw the opportunity on LinkedIn, thought it was very relevant for our business, and decided to apply for it. We are humbled to have gotten to the Top 20, out of more than 21,000 applications submitted.
Let’s talk about funding. MarketForce has done considerably well in raising funds. What’s the total cap raised this far?
To date, we’ve raised $42M in debt and equity to scale our services and for geographic expansion in Africa. Our investors represent a range of exceptional Africa-based and global tech and retail investors.
Still on funding. Do you think African startups are getting the funding and attention they deserve from local and foreign VCs? How is ABH bridging that gap?
Both International and local VCs are taking note of the massive opportunity across various sectors in Africa (especially technology), so I would say the trend is generally positive. A recent report states that over $5 billion was raised by African startups, from about 700 equity rounds last year, up 3 times from 2020 figures of $1.4 billion. ABH is at the forefront of promoting the best African startups through this competition by elevating the status of entrepreneurship as a vehicle to prosperity.
As an experienced founder, what better ways would you propose to address the gap between concepts and funding or to link up founders and VCs?
Everyone should focus on doing their part. As founders, we should continue to solve problems that matter and think about building companies that can compete at a global scale, attracting the right investors in the process.
The B2B marketplace that MarketForce is bridging has seen a rise in operators/competitors in recent years. Will it still remain competitive?
Absolutely. The pie is big enough for several major players. MarketForce is the marriage of retail tech and fintech, crafting a comprehensive, fit-for-purpose solution for Africa’s retailers. We are novel in that we are a B2B super-app for merchants, consolidating all of their business needs in one easy-to-use platform.
Apart from funding, what challenges have you identified in running a B2B marketplace in Africa? Are the challenges the same for small and bigger B2B enterprises alike?
As a business, the core challenge we face is balancing growth with profitability. Over the past two years, we have blitz-scaled, growing from 300 merchants in July 2020 to 100k by November 2021 and, notably, from there to 200k merchants in the following 6 months, by May 2022. We’ve had a focus on customer acquisition. Now, we are transitioning to an emphasis on a path to profitability which requires a different set of business operations.
You’ve had quite an illustrious career and commendable achievements as a young entrepreneur – being a top 20 finalist in the ABH especially. What critical lessons have you picked in your journey that you would want to share with other aspiring entrepreneurs?
First, I believe that entrepreneurship is the greatest tool to create social impact and touch the lives of millions of Africans in a sustainable way. So be resilient because what you are doing has the potential to change many lives. Second, I’ve always been a firm believer that iron sharpens iron. Therefore, it is important to participate in initiatives where you can meet peers, collaborate, learn and share ideas that can impact the continent and the world.
What skills/attributes have been instrumental in propelling you to global competitiveness?
I think many entrepreneurs are building great businesses but do not tell a great story alongside it. Being able to explain concisely and convincingly what problem you solve, how you are going to solve it, why you will have an impact in the market, why you will win and how big your business can get is very critical in building a globally competitive business.
What do you think made you stand out among all the other ABH contestants?
Making sure we demonstrated initial business traction and a stellar team that executes on the vision was important. We also showed that we understand our market and competition, have a clear business model and understand the fundamentals such as unit economics.
Any closing remarks.
Our mission is to be the ultimate partner for informal merchants, empowering them to maximize their profits and grow in a digital age by getting better service, assortment, and access to new revenue opportunities. We are happy to partner with anyone who can contribute to this mission as a team member, supplier, investor or even an evangelist of the work that we are doing to make Africa a better place to be.