Almost four years after pivoting from software company, Mesozi, founder Tesh Mbaabu and his team have been basking in funding for the fall-out of the pivot — the Nairobi-based retail-tech startup MarketForce. Apart from recently acquiring Digiduka, a two-year-old Kenyan startup dedicated to bringing Africa’s informal shops into the digital economy, and raising $350k seed funding last year, the startup has landed $2m in Series A round of funding partly from its former investors. Existing investors such as P1 Ventures and Y Combinator, as well as new investors such as Launch Africa, V8 Capital, Future Africa, GreenHouse Capital, Rebel Fund, Remapped Ventures, and other undisclosed angel investors, participated in this round.
MarketForce intends to use this round of funding to launch RejaReja, a platform it launched in December 2020 which helps informal retail merchants buy and sell FMCGs and digital financial services, in Nigeria as well as more East African cities. Over 15,000 retail clients already utilize RejaReja to handle thousands of orders everyday in Kenya, Uganda, and Tanzania, where the firm has a presence.
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“We’ve run both models simultaneously and we’ve seen much faster traction on the e-commerce side of the marketplace. We’re investing more and more resources into that, and the pre-Series A round was raised to focus on scaling that platform,” CEO said.
Why The Investors Invested
Fundamentally, investors in this round invested because the startup has gained a lot of traction, though RejaReja also played a role in persuading investors because products like RejaReja has already been used by other African startups like TradeDepot and Sokowatch, which are also attempting to revamp supply-chain markets for Africa’s informal retailers. Over 10,000 monthly active users have already signed up for MarketForce’s patented SaaS offering. Since its introduction in 2018, these users have completed 300,000 transactions totaling more than $500 million. Pepsi, Safaricom, Fort Beverages, Lami, and Platinum Credit are among MarketForce’s clients.
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“…MarketForce has proven that they know how to leverage the entire retail supply chain as a gateway for digital payments. Their organic, as well as acquisition-driven growth and expansion strategy thus far, has proven that their understanding of unit economics and marginal customer acquisition costs is solid. As a pan-African fintech company, they are very well positioned to tap into the $700 billion that gets transacted in this space every year,” managing partner at Launch Africa, Zachariah George, said in a statement.
The startup’s membership in the Y Combinator Summer 2020 Batch has also served as a crucial fundraising reference point. Following its acceptance into the program, MarketForce360 got $150,000 from the US-based accelerator. The validation from Y Combinator came after ViKtoria Business Angels Network (VBAN) had previously invested $350k in the firm. EchoVC Partners, P1 Ventures, and Ventures Platform also joined the network at the time.
A Look At What The Startup Does
MarketForce was formed in 2018 by Tesh Mbaabu and Mesongo Sibuti. Through its network of agents, MarketForce enables the optimal distribution of Fast Moving Consumer Goods and financial services (FMCG).
RejaReja, the company’s recently introduced offering, will provide next-day delivery for a few FMCG brands. Though the company’s flagship MarketForce retail distribution product is still growing, the founders believe RejaReja holds the majority of the company’s finest opportunities.
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RejaReja, a MarketForce subsidiary, operates an asset-light approach in which it does not own capital assets such as warehouses or delivery vans. The majority of the assets are leased from the company’s partners (distributors, manufacturers, and third-party logistics providers) to fulfill orders.
Marketforce retail-tech Marketforce retail-tech
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer