The news:
- MarketForce, a Kenyan-born sales force automation software startup founded in 2018, has announced the shutdown of RejaReja, its B2B eCommerce platform, and the launch of its new venture, Chpter, a social commerce platform.
- Per the company, Chpter is already in Kenya and South Africa, assisting hundreds of merchants in increasing revenue through social media channels.
- Tesh Mbaabu, MarketForce co-founder and CEO, announced the development in a blog post on his website on Wednesday, April 17, 2024.
Chpter is “an AI-powered conversational commerce platform that enables merchants to sell more on social platforms like WhatsApp and Instagram by automating conversations, marketing, and payments all in one place.“
Mbaabu explained the unfortunate turn of events to RejaReja, citing the razor-thin margins of the retail fast-moving consumer goods (FMCG) market, which caused the B2B distribution business to struggle with unit-level profitability, as one of the major reasons it had to close.
The CEO also stated that RejaReja became unsustainable due to the industry”s persistently high price elasticity, making price wars a constant struggle.
After several attempts to tweak its business model to achieve sustainability, including reducing its workforce to extend the runway for as long as possible, the company closed its eCommerce operation in what it described as the “final chapter.”
In 2018, Mbaabu and Mesongo Sibuti launched MarketForce, which was accepted into Y Combinator, a startup accelerator, in 2020 and raised $2 million in 2021 to develop and expand its product.
The company also received a considerable Series A investment of $40 million in 2022 at a valuation of $100 million.
In just three years, the eCommerce platform expanded to 21 new cities in five African countries: Kenya, Nigeria, Uganda, Tanzania, and Rwanda, delivering approximately 1 million orders and completing over $160 million in gross transaction volume.
The company said it helped over 270,000 merchants and created over 800 jobs. However, these were insufficient to keep the business running in the end.
Meanwhile, MarketForce was a SaaS company that sold enterprise software to large FMCGs and financial institutions before launching RejaReja. But Mbaabi said the startup’s business model suffered from several fundamental flaws the company couldn’t overcome.
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“The growth was slow, the sales cycles were incredibly long.”
These challenges compelled the company to abandon its first business in favour of a second, ostensibly superior one, which has also failed.
With Chpter, MarketForce’s third attempt at running a viable business, Mbaabu is confident that the lessons learned from the previous two failed ventures will help it become not only profitable but also sustainable.