Sylvia Duruson
In a strategic move, the Kenyan startup MarketForce, backed by Y Combinator, has announced the shutdown of its B2B e-commerce platform, RejaReja. The company’s co-founder, Tesh Mbaabu, shared this development in a blog post on Wednesday afternoon, while also unveiling the company’s new venture, Chpter, a social commerce startup.
Mbaabu cited the razor-thin margins and profitability struggles at the unit level as the primary factors contributing to the decision to close the RejaReja business vertical. “The segment is also highly price elastic, which means the price wars are consistent. That’s always a race to the bottom,” he explained.
MarketForce initially began as a sales automation software but later pivoted to B2B e-commerce with RejaReja. The platform allowed neighborhood merchants and small-time retailers to stock up their shops with goods from leading FMCG brands like Unilever and Nestle. It also provided customers with access to digital financing through a partnership with Pezesha, a business credit provider.
“Unfortunately, that is our closing chapter. 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.
The B2B e-commerce space had initially generated considerable excitement from investors, which helped propel MarketForce’s early success. The company raised $2 million and was accepted into Y Combinator in the summer of 2020. It also achieved the milestone of supporting over 1 million merchants and raised $40 million in 2022 at a valuation of $100 million.
However, the initial excitement in the segment has waned over time. Investors who had previously signed million-dollar checks have now slowed down their investments. In December 2023, two heavily funded B2B e-commerce players, Wasoko and MaxAB, merged in an effort to create a category leader. Meanwhile, the Nigerian startup Alerzo has had to cut employees thrice in as many years as it strives for profitability.
MarketForce also faced challenges in meeting its financial obligations to its credit partner, Pezesha, but the two companies have since resolved the matter internally, avoiding a liquidation suit filed by Pezesha.
With the closure of RejaReja, MarketForce is now turning its attention to its new venture, Chpter, a social commerce startup that provides an AI-powered conversational platform to automate conversations on WhatsApp and Instagram for business owners. This pivot marks a strategic shift for the company, as it seeks to capitalize on the growing trend of social commerce in the African market.
