MarketForce, the retail B2B and end-to-end distribution platform founded in Kenya, has raised $40 million in Series A funding for its merchant inventory financing and expansion across Africa.
MarketForce, which was launched in Uganda, Tanzania and Rwanda last year after growing beyond Kenya and Nigeria, plans to introduce buy-now-pay-later (BNPL) options to help merchants access fast-moving-consumer-goods (FMCGs) on credit. It also plans to enter additional markets in East and West Africa.
Through its merchant super app RejaReja, informal traders can source goods (hundreds of SKUs) directly from manufacturers and distributors, make and pay for orders digitally, accept payments for utility bills and access loans for their businesses. The RejaReja retail marketplace was launched in 2020 as a brainchild of MarketForce, a SaaS product for the formal markets, founded by Tesh Mbaabu and Mesongo Sibuti in 2018.
“Our mission is to enable SMEs to grow, and what we’ve realized over time is that offering them loans is great, but that we need to empower them to access goods. And that’s why we’ve introduced this merchant inventory financing, which is like an overdraft facility, where they’re able to order goods and pay later after selling them. We started a pilot and it is going well,” MarketForce CEO and co-founder Mbaabu told TechCrunch.
During the pilot, Mbaabu said that order stock value tripled, underlining the demand for such tailored inventory financing options for traders who sell a huge chunk of all the FMCGs sold across sub-Saharan Africa.
“We’re very deliberate about extending working capital and that’s why we raised some debt and also because we are looking at that fintech angle as our big frontier for the next phase of our business,” said Mbaabu.
This latest round (equal amount of debt and equity) brings the total funds raised by MarketForce to date to $42.5 million. It also comes seven months after the startup raised $2 million in a pre-Series A round.
The latest 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. Existing investors that took part in the round include Reflect Ventures, Greenhouse Capital, Century Oak Capital and Remapped Ventures. Cellulant co-founder Ken Njoroge, who joins the MarketForce board as chairman, also took part in the round.
“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,” said V8 Capital General Partner and member of the MarketForce board, Tobi Oke.
