MarketForce, a Nairobi-based B2B platform for consumer goods retail distribution and digital financial services in Africa, has announced the closing of a $40 million Series A round, the largest of its kind in East and Central Africa. The funding comes seven months after the company completed a pre-Series A round.
The round was led by V8 Capital Partners – a London and Lagos based African-focused investment vehicle – with participation from Ten13 VC, SOSV Select Fund, Vu Ventures, Vastly Valuable Ventures, Uncovered Fund, along a number of existing investors; Reflect Ventures, Greenhouse Capital, Century Oak Capital and Remapped Ventures. Ken Njoroge, Cofounder and former CEO of Cellulant also participated in the round and joins the board as Chairman. The oversubscribed round was made up of equity and debt.
In sub-Saharan Africa, approximately 90% of household retail transactions are in cash, and delivered through a network of about 100 million MSMEs. Retail payments on the continent are expected to top $2.1 trillion by 2025, and MarketForce aims to digitize a large portion of these offline transactions.
Co-founded in 2018 by Tesh Mbaabu and Mesongo Sibuti, MarketForce is a leading B2B Commerce and Fintech marketplace that empowers informal merchants in Africa to order, pay and receive inventory digitally and conveniently, access financing, collect digital payments and make extra money by reselling digital financial services such as airtime, electricity tokens and bill payments.
MarketForce runs an asset-light operating model and is currently operational in 5 markets (Kenya, Nigeria, Uganda, Tanzania and Rwanda) with the merchant super app, RejaReja – which offers informal merchants next-day delivery for hundreds of SKUs from the leading FMCG brands. One year ago, MarketForce served about 5,000 customers: now, that figure has grown more than twenty-fold to 100,000 merchants, processing 6,000 daily transactions, with the average transaction size tripling and revenue growing 27x over the same period.
On the supplier side, MarketForce monetizes through availing real-time market intelligence dashboards to FMCGs. MarketForce counts top consumer brands and financial service providers such as Nestle, Pepsi, Flour Mills of Nigeria, Bidco Africa, Chandaria Industries, Kapa Oil, Safaricom, Cellulant, Lami and Pezesha, to mention a few, as its partners.
With this round of funding, MarketForce plans to scale merchant inventory financing through a BNPL offering, grow deeper in existing markets and avail more digital financial and banking services through its extensive merchant network. MarketForce has a team of 400 and intends to double the team before the end of the year.
“Our goal is be the ultimate partner for informal merchants, empowering them to maximize their profits and grow in a digital age by getting better service, assortment, and access to new revenue opportunities, outfitting them with the technology and support they need to transform themselves from simple FMCG outlets to comprehensive financial service hubs for the continent’s last-mile communities,” said Tesh Mbaabu, Cofounder and CEO of MarketForce. “We are targeting to serve over 1 million active merchants on our platform in Sub-Saharan Africa by 2025.”
“Marketforce demonstrates what we see as a triple threat with regards to returns. A strong executive team with an amazing track record, an expansive untapped market of informal retailers across the continent and a business model that scales extremely quickly. We are proud to partner with Tesh and Mesongo in accelerating the digitization of the African retail ecosystem which will help improve the lives of millions of informal african merchants,” said Tobi Oke, General Partner at V8 Capital and member of the MarketForce board.