MarketForce shuts down operations in Nigeria, Rwanda and Tanzania
MarketForce, a B2B e-commerce business, has concluded operations in three of its five African territories. The startup will now solely operate in Kenya and Uganda, with Kenya serving as its headquarters, after leaving Nigeria, Rwanda and Tanzania.
As per a report published in The Kenyan WallStreet, the company is currently investigating other business strategies, one of which involves entering the social commerce domain.
CEO Tesh Mbaabu told The Kenyan WallStreet, “Marketforce has downscaled operations in other markets and is now just operational in Kenya and Uganda.”
Tesh Mbaabu and Mesongo Sibuti founded MarketForce in 2018 to enable African informal merchants to order, pay for, and receive inventory digitally and conveniently. They also wanted to give them access to financing, collect digital payments, and earn additional revenue by reselling digital financial services like airtime, electricity tokens, and bill payments. The firm has grown over time to become one of the top pan-African e-commerce platforms that support stores.
With the merchant super app RejaReja, MarketForce operates an asset-light operating model that provides informal merchants with next-day delivery for hundreds of SKUs from the top FMCG brands. In a previous interview with TechTrends Media, Mbaabu stated that the company had blitz-scaled over the last two years, going from 300 merchants in July 2020 to 100k by November 2021 and, most impressively, from there to 200k merchants by May 2022 in the following six months.
Our primary focus has been on acquiring new customers. We are now shifting our focus to a route to profitability that calls for an alternative set of business processes, he stated.
“Our goal is to be the best partner for unofficial retailers, giving them the tools they need to grow and maximize their profits in the digital age by providing improved service, a wider selection, and access to new revenue streams,” he continued.
What is actually causing Markeftorce to close its stores in the three nations, then? As one of the African startups affected by the funding crunch, Marketforce has had to look at other options for obtaining capital and generating income. Disrupt Africa has revealed statistics that indicates a notable decrease in funding raised by African digital entrepreneurs in Q1 of 2023 as compared to the same period in the previous year. African companies raised $649 million in Q1 of 2023 compared to $1.5 billion in the same period in 2022. According to Mbaabu, this has also been exacerbated by low profit margins in competitive countries with high servicing costs, such as Nigeria.
