Kenyan B2B e-commerce firm MarketForce is shutting down its business-to-business arm, RejaReja, which targeted informal merchants such as small mom-and-pop stores. This decision follows a challenging two-year period marked by significant operational cutbacks.

Initially launched in 2020, RejaReja aimed to connect informal retailers with distributors and manufacturers to order fast-moving consumer goods (FMCGs), addressing common issues like stock shortages and financing. Despite its ambitions to capitalize on the informal retail sector, which constitutes roughly 80% of household trade in sub-Saharan Africa, RejaReja is ceasing operations just months after pulling out of its markets in Nigeria and Kenya, continuing only in Uganda until now.

At its height, RejaReja employed over 800 staff and catered to 270,000 informal merchants. MarketForce had secured $42.5 million in funding, including a significant $40 million from a debt-equity Series A round in 2022, valuing the company at more than $100 million.

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The closure stems from several factors, including aggressive expansion plans, a capital-heavy business model, slim profit margins, and a recent funding shortfall after an investor failed to fulfil their financial commitment. These challenges mirror broader struggles within the African B2B e-commerce sector amid ongoing financial constraints.

Tesh Mbaabu

MarketForce co-founder Tesh Mbaabu explained,

“The retail FMCG market's very thin margins and high price elasticity have made it difficult to maintain profitability at a unit level. Despite extensive efforts to adapt and downsize our operation to prolong its viability, it has become clear that sustaining RejaReja is no longer feasible.”

MarketForce, which has received backing from prominent investors such as Y Combinator and V8 Capital Partners, is now pivoting to launch Chpter, a new venture. Described by Mbaabu as an AI-driven conversational commerce platform, Chpter aims to enable merchants to sell products through social media platforms.