MarketForce, a startup established in Kenya in 2018 specializing in sales force automation software, has recently made a significant strategic shift. The company declared the cessation of its business-to-business (B2B) eCommerce service, RejaReja, while simultaneously unveiling its latest project named Chpter, a platform aimed at social commerce.
According to the company’s disclosures, Chpter has already initiated operations within Kenya and South Africa, supporting hundreds of local merchants to amplify their sales using popular social media platforms.
On a Wednesday, specifically April 17, 2024, Tesh Mbaabu, the co-founder and Chief Executive Officer of MarketForce, shared this news via an extensive blog post on his personal website. Within this announcement, Mbaabu provided insights into the functionalities of Chpter. Described as an artificial intelligence (AI) enhanced conversational commerce platform, Chpter empowers vendors to boost their sales on various social channels, including WhatsApp and Instagram. It does so by encompassing automated messaging services, targeted marketing, and consolidated payment processes, all integrated seamlessly.
In discussing the reasons behind ending RejaReja, Mbaabu highlighted the major challenges encountered in the B2B distribution of retail fast-moving consumer goods (FMCG). He noted that the minimal profit margins within this sector made it inevitably difficult for RejaReja to maintain profitability on a per-unit basis.
Additionally, Mbaabu mentioned the pervasive issue of high price sensitivity within the industry, leading to an environment rife with price competition, which ultimately contributed to making RejaReja’s business model unsustainable.
Despite numerous efforts to refine its business approach in the pursuit of a viable and enduring model, including measures such as downsizing staff to prolong the operation’s financial runway, MarketForce ultimately made the decision to discontinue its eCommerce platform. This move was lamentably referred to as the “final chapter” for that segment of their business.
The genesis of MarketForce dates back to 2018 when Tesh Mbaabu and Mesongo Sibuti co-founded the enterprise. In a notable achievement, the company was selected to participate in the prestigious Y Combinator startup accelerator program in 2020. Following this, MarketForce succeeded in securing $2 million in funding during 2021, the purpose of which was to invest in the development and broadening of their product offerings.
In a significant stride forward, MarketForce attracted a substantial investment in 2022. The Series A funding round resulted in a $40 million infusion at a commendable company valuation of $100 million.
MarketForce’s eCommerce platform experienced rapid growth in a relatively short period. In just three years, the platform extended its reach to include 21 new urban centers across five different African nations—namely Kenya, Nigeria, Uganda, Tanzania, and Rwanda. In terms of operational metrics, the platform was responsible for the delivery of close to 1 million orders, achieving over $160 million in gross transaction volume.
Throughout its operation, the company’s efforts contributed significantly to the local economies by supporting more than 270,000 merchants and generating in excess of 800 job opportunities. Despite these considerable accomplishments and the impact made on numerous lives and businesses, these achievements were not enough to sustain the eCommerce business in the longer term.
Prior to the inception of RejaReja, MarketForce was primarily engaged as a Software-as-a-Service (SaaS) enterprise, providing specialized software solutions to sizable corporations within the Fast-Moving Consumer Goods (FMCG) sector as well as to various financial institutions. These software services were designed to assist these businesses in automating and optimizing their sales processes and workforce management, thereby enhancing efficiency and productivity.
However, Tesh Mbaabu, the CEO and co-founder of MarketForce, acknowledged that when the company ventured into the RejaReja project, it encountered a number of intrinsic weaknesses within its business model that proved insurmountable. These foundational issues were significant enough to impede the long-term viability and sustainability of the eCommerce platform, ultimately leading to its closure.
Despite the business acumen and the efforts to continually adjust and reform the operational strategy to address these flaws, the challenges, including the intense competition within the industry, combined with the inherently low margins that characterize the FMCG sector, resulted in a situation that did not allow for the attainment of the necessary profitability and growth required to keep RejaReja afloat.
Tesh Mbaabu pointed out critical obstacles that MarketForce faced with their initial SaaS-oriented business model, highlighting the sluggish pace of growth, coupled with protracted sales cycles that were particularly lengthy. These factors considerably hampered the company’s dynamism and progress, making it difficult to achieve rapid scalability and market penetration.
Confronted with these substantial challenges, MarketForce made the strategic decision to pivot away from its primary enterprise software offering. They ventured into RejaReja, their first transition into the realm of B2B eCommerce. However, despite the change in direction and the potential initially seen in this new venture, RejaReja also did not meet the expectations of sustainability and success, leading to its eventual shutdown.
In the wake of these two unsuccessful endeavors, MarketForce has embarked on what can be considered its third significant business pursuit with the introduction of Chpter. This platform represents the company’s entry into the social commerce landscape and stands as a testimony to the resilience and adaptability of the firm.
Mbaabu expresses his confidence in Chpter, bolstered by a belief that the company has gleaned valuable insights and expertise from its previous ventures. The expectation is that this rich reservoir of experiences and the strategic learnings drawn from the past will be pivotal in steering Chpter to not only achieve profitability but to also establish a robust foundation for long-term sustainability.
