Kenyan B2B e-commerce startup MarketForce has wound up operations in three of its five markets in Africa.
The startup is exiting Nigeria, Rwanda and Tanzania and will now remain operational only in Kenya and Uganda with Kenya remaining its headquarters.
According to a report by The Kenyan WallStreet, the firm is now exploring other business models which include venturing into the social commerce space.
“Marketforce has downscaled operations in other markets and is now just operational in Kenya and Uganda,” CEO Tesh Mbaabu, told The Kenyan WallStreet.
MarketForce was founded in 2018 by Tesh Mbaabu and Mesongo Sibuti to empower informal merchants in Africa to order, pay and receive inventory digitally and conveniently, access financing, collect digital payments and make extra money by reselling digital financial services such as airtime, electricity tokens and bill payments. Over the years, the startup has become among the leading pan-African e-commerce marketplaces powering retailers.
MarketForce runs an asset-light operating model with the merchant super app, RejaReja – which offers informal merchants next-day delivery for hundreds of SKUs from the leading FMCG brands.
Mbaabu said in an earlier interview with TechTrends Media that the company has in the past two years 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,’’ he said.
‘’Our mission is to be the ultimate partner for informal merchants, empowering them to maximise their profits and grow in a digital age by getting better service, assortment, and access to new revenue opportunities,‘’ he added.
So what’s really making Markeftorce close shop in the three countries? Well, Marketforce is among the African startups that have been hit by a funding drought forcing it to explore alternative avenues for financial support and revenue generation. Recent data released by Disrupt Africa shows that African tech startups experienced a significant decline in capital raised in Q1 of 2023 compared to the same period last year. In Q1 of 2023, African startups raised $649 million, while in the same period in 2022, startups raised $1.5 billion.
Mbaabu says that narrow profit margins in demanding markets like Nigeria, where servicing costs are high and competition is intense have also contributed to this.
What’s next for MarketForce?
As it seeks to raise more revenue, the startup is now venturing into the social commerce space.
“We are figuring out more profitable and high-margin segments and that is why we decided to move into social commerce,” says Mbaabu, according to a report by benjamindada.com.
This is an interesting route to take with startups like Kenya’s Tushop and Nigeria’s Peppa.io already doing great work around this space. The industry is expected to grow by 36.8% on an annual basis in Africa to reach US$9.93 billion in 2023 according to data from Research and Markets.