MarketForce, the retail B2B and end-to-end distribution platform based in Kenya, has raised $40 million in Collection A funding for its service provider stock financing and enlargement throughout Africa.
MarketForce, which was launched in Uganda, Tanzania and Rwanda final 12 months after rising past Kenya and Nigeria, plans to introduce buy-now-pay-later (BNPL) choices to assist retailers entry fast-moving-consumer-goods (FMCGs) on credit score. It additionally plans to enter extra markets in East and West Africa.
Via its service provider tremendous app RejaReja, casual merchants can supply items (tons of of SKUs) immediately from producers and distributors, make and pay for orders digitally, settle for funds for utility payments and entry loans for his or her companies. The RejaReja retail market was launched in 2020 as a brainchild of MarketForce, a SaaS product for the formal markets, based by Tesh Mbaabu and Mesongo Sibuti in 2018.
“Our mission is to allow SMEs to develop, and what we’ve realized over time is that providing them loans is nice, however that we have to empower them to entry items. And that’s why we’ve launched this service provider stock financing, which is like an overdraft facility, the place they’re in a position to order items and pay later after promoting them. We began a pilot and it’s going effectively,” MarketForce CEO and co-founder Mbaabu informed TechCrunch.
In the course of the pilot, Mbaabu mentioned that order inventory worth tripled, underlining the demand for such tailor-made stock financing choices for merchants who promote an enormous chunk of all of the FMCGs bought throughout sub-Saharan Africa.
“We’re very deliberate about extending working capital and that’s why we raised some debt and in addition as a result of we’re taking a look at that fintech angle as our huge frontier for the following section of our enterprise,” mentioned Mbaabu.
This newest spherical (equal quantity of debt and fairness) brings the entire funds raised by MarketForce thus far to $42.5 million. It additionally comes seven months after the startup raised $2 million in a pre-Collection A spherical.
The most recent spherical was led by V8 Capital Companions; a London and Lagos based mostly African-focused funding automobile with participation from Ten13 VC, SOSV Choose Fund, Vu Ventures, Vastly Worthwhile Ventures, Uncovered Fund. Present buyers that took half within the spherical embrace Mirror Ventures, Greenhouse Capital, Century Oak Capital and Remapped Ventures. Cellulant co-founder Ken Njoroge, who joins the MarketForce board as chairman, additionally took half within the spherical.
“MarketForce demonstrates what we see as a triple menace on the subject of returns. A powerful government workforce with an incredible monitor report, an expansive untapped market of casual retailers throughout the continent, and a enterprise mannequin that scales extraordinarily rapidly,” mentioned V8 Capital Normal Companion and member of the MarketForce board, Tobi Oke.
MarketForce additionally plans to double its workforce to 800 and develop the variety of retailers utilizing the RejaReja app by 2.5 instances to 250,000 over the following few months, rising from 5,000 they served a 12 months in the past. A progress in service provider quantity and RejaReja’s enlargement additionally means new markets for FMCG manufacturers.
RejaReja is an asset-light mannequin that means that it doesn’t personal capital property like warehouses and supply vehicles as most of them are supplied by its companions that embrace producers and distributors. Its nature of enterprise permits it to develop quick.
“We grew to tier two cities in markets that we’re in. This has additionally opened up distribution alternatives for manufacturers that weren’t beforehand in a position to entry these markets,” mentioned Mbaabu.
Throughout an interview in December final 12 months, Mbaabu informed TechCrunch that RejaReja expects its retailers to develop to 1 million by the tip of this 12 months as it really works in direction of digitizing the estimated 100 million small merchants throughout sub-Saharan Africa.
He additionally mentioned that since launch, RejaReja had grown exponentially with over 87,000 orders made by way of the platform at a median basket worth of $151. With a 40% month-on-month progress, it anticipated to report over $60 million in annualized transaction volumes on the finish of final 12 months. Different gamers streamlining the casual B2B provide chain in Africa embrace TradeDepot and Sokowatch.
About 80% of family retail in sub-Saharan Africa is delivered by way of casual retailers however these retailers are confronted with a variety of challenges like stockouts, earnings instability and lack of financing, elements that make it onerous for his or her companies to develop.
MarketForce, by way of RejaReja, solves this by offering a market the place casual merchants can supply items immediately, which additionally retains the costs of merchandise aggressive by eradicating the necessity for brokers, and ensures the next-day supply of products. It additionally makes use of the merchants’ transaction historical past to develop the credit score profiles wanted to safe loans. The startup has a partnership with Pezesha — a digital monetary market platform — to increase loans to its retailers.
MarketForce plans extra partnerships to carry on board different companies for retailers like insurance coverage, financial savings and funding.
“The purpose of RejaReja is to be the tremendous app of the casual market. We’d just like the retailers to have one entry level for all of the totally different monetary and digital companies they should develop within the digital age,” mentioned Mbaabu.