Posted by MarketForce, a Kenyan B2B ecommerce startup, has significantly scaled down its operations amidst funding challenges. Co-founder and CEO Tesh Mbaabu announced the company’s withdrawal from three of its five operating markets, retaining operations solely in Kenya and Uganda and pausing its expansion into Ethiopia and Ghana. MarketForce’s exit from Nigeria, Rwanda, and Tanzania comes amid tight profit margins and stiff competition, particularly highlighted in Nigeria’s demanding market landscape.
In a strategic shift, MarketForce is eyeing the burgeoning social commerce sector within Kenya through the launch of its new platform, Chpter. This move aims to leverage the growing trend of social media as a springboard for commerce in Africa, where nearly 400 million people are engaged with social media platforms, which are increasingly becoming a gateway to online shopping.
The African social ecommerce space, valued at $9 billion in 2022, is forecasted to experience significant growth. It presents an opportunity for financial inclusion, especially for SMEs and informal businesses that may struggle to secure funding for traditional retail expansion. In Kenya, a substantial 92% of SMEs have integrated social commerce into their business models, overshadowing the use of formal platforms such as Jumia.
MarketForce faces stiff competition in the Kenyan market, with Tushop already having established a strong presence through a substantial pre-seed funding round. MarketForce’s own RejaReja, a super app designed to connect informal retailers with FMCGs, has been downscaled in Kenya, remaining active only in Uganda. The Ugandan market has proven more profitable for MarketForce, with Mbaabu citing exclusive distributor contracts and better margins as reasons for maintaining operations there.
Venture capital (VC) funding in Africa has been significantly affected in 2023 by the global economic downturn and the ongoing funding crunch for startups. According to a report by Briter Bridges, VC funding in Africa declined by 40% in the first half of 2023, compared to the same period in 2022. This decline was seen in both the number of deals and the total amount of capital invested.
Here are some ecommerce B2B companies in Africa that have scaled down or shut down in recent months:
Wabi (Africa): Wabi, an ecommerce platform backed by Coca-Cola, announced in January 2023 that it was shutting down operations in five African markets, including Nigeria, Kenya, and Egypt. The company said that it would focus on its core markets of Latin America and the Middle East.
Zumi (Kenya): Zumi, a Kenyan B2B e-commerce startup, shut down in March 2023 due to its inability to raise capital.
Twiga (Kenya): Twiga has laid off employees twice in the past year. In November 2022, the company laid off 21% of its workforce, and in August 2023, the company laid off 33% of its workforce. The company has attributed the layoffs to a number of factors, including the need to streamline operations, reduce costs, and become more agile. The company has also said that the layoffs are necessary to ensure its long-term viability. Twiga also needs to reach an agreement with its creditors to restructure its debt. This will allow the company to reduce its financial burden and focus on growing its business.
The Supply Chain Lab 