Kenya's MarketForce has closed the largest Series A round in East and Central Africa
Retail payment startup, MarketForce today announced that it has closed a $40 million Series A round led by V8 Capital Partners with participation from Ten13 VC, SOSV Select Fund, Vu Ventures, Vastly Valuable Ventures, Uncovered Fund.
Existing investors such as Reflect Ventures, Greenhouse Capital, Century Oak Capital and Remapped Ventures. Ken Njoroge, co-founder 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.
Last year, the B2B platform powering retail distribution of consumer goods and digital financial services in Africa raised a total of $2.5 million, which includes its $350,000 seed round and $150,000 check from Y Combinator as part of the accelerator’s Summer 2020 batch.
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.
A 2016 study by global consultancy PwC states that an estimated 90% of sales in Africa’s major economies come through informal channels like markets and kiosks. In sub-Saharan Africa, 90% of these household retail transactions are carried out via a network of about 100 million MSMEs.
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.
Building the “Operating System” for retail distribution in Africa
According to Tesh Mbaabu, Cofounder and CEO of MarketForce: "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."
Mbaabu revealed that the startup is targeting to serve over 1 million active merchants on our platform in Sub-Saharan Africa by 2025. With this round of funding, MarketForce plans to scale merchant inventory financing through a Buy Now, Pay Later (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.
"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", Tobi Oke, General Partner at V8 Capital and member of the MarketForce board stated.