Kenyan retail-tech MarketForce has closed down its B2B e-commerce platform RejaReja in the light of failing to adequately scale it given the global “funding winter”, and has instead pivoted to a focus on social commerce with a new joint venture called Chpter.
Co-founded in 2018 by Tesh Mbaabu and Mesongo Sibuti, MarketForce began life as a sales force automation software company, but soon pivoted to operate a B2B retail marketplace, RejaReja, where informal merchants in Africa could source, order and pay for inventory digitally and conveniently, as well as other things.
In the light of failing to properly scale the platform, in the wake of global economic conditions that affected its ability to fundraise, MarketForce has now closed RejaReja, and pivoted to a new joint venture, Chpter, which provides AI-powered chat automation tools for businesses on platforms like WhatsApp and Instagram.
In a blog post explaining the move, Mbaabu said MarketForce’s B2B e-commerce platform had gained a lot of traction, to the team’s surprise.
“From our vantage point, we knew it was a bold move and people we respected advised us against it, but we went ahead and did it. It was quite a gamble, but there is also a bliss in naivety that allows you to jump into those kinds of situations, guns blazing. We were determined to prove everyone wrong and in six months, we’d signed up over 1,000 merchants, which validated that we’d successfully made the pivot,” he said.
The startup was selected into Y Combinator, raised a US$2 million seed round, and followed that up with what was in theory a US$40 million Series A in 2022.
“In just three years, we expanded our footprint to 21 cities across five countries – Kenya, Nigeria, Uganda, Tanzania, and Rwanda – creating over 800 jobs and serving over 270,000 merchants. During that period, we have delivered just shy of one million orders, amounting to over US$160 million in gross transaction volume on RejaReja alone,” Mbaabu said.
Yet all was not as it seemed. MarketForce sought aggressive expansion, but did not realise that “we were treading in new territory or anticipate the “funding winter” that would strike later that year”, Mbaabu said. Large portions of the anticipated Series A funding never materialised as investors backed out, citing global conditions.
“Venture capital is not for good, or even great, companies. It’s for companies that are so excellent that they produce outsized returns at the right time in the right market. We got this completely wrong, and it hurt us when the committed capital didn’t fully come through,” said Mbaabu.
MarketForce worked to stem the bleeding, scaling back operations in Nigeria, Rwanda, and Tanzania late last year. Yet it continued to face issues, with local startup Pezesha filing a petition for liquidation over unpaid debts. RejaReja had become unsustainable.
“After immense efforts to make our business model sustainable, including downsizing the business to extend the runway for as long as possible, we have concluded that it is no longer feasible to keep RejaReja operational,” Mbaabu said.
MarketForce has pivoted again, with RejaReja closing, and the founding team now partnering with fellow Kenyan startup Chpter to focus on social commerce. Co-founded by Mark Kiarie and Kuria Kevin, Chpter empowers businesses to unlock more revenue through the fastest growing commerce channel – social media. It is live in Kenya and South Africa.
“Mark and Kuria founded Chpter in 2021 and built an elegant online payment checkout experience for this segment. Funnily enough, Mesongo and I had invested in Chpter in the early days because we loved the co-founders and thought the segment had a lot of potential,” Mbaabu said.
“As we weighed a couple of pivot options we had a couple of conversations with Mark and Kuria and agreed that we could do a lot more and build bigger together. Mark and Kuria being ex-architects were extremely close to the product while Mesongo and I had experience when it came to scaling the technical and commercial elements of the business.”
The MarketForce founders are joining the Chapter management team – both as co-founders, while Mbaabu will be CEO and Sibuti as CPO – while all MarketForce shareholders will get some shares in Chpter. MarketForce remains alive as a holding vehicle, and may still launch other products, but Mbaabu said the focus is now on Chpter.
“With Chpter we anchored on a single insight and a single solution for a single merchant. We could call the last six months the silent months. We hunkered down with a small team focused on speaking to customers and building a product they cared about. We refined our focus and thesis on what we’re building for who we’re building and how big we want this to be,” he said.
“Moreso, we focused on building the business around our superpowers (our innate passions and skills) as co-founders. Our collective experience in product strategy, software engineering, business development, and marketing come together around a mission to empower one million merchants in Africa to maximise their profits and grow in a digital age.”
