Kenya’s MarketForce Gets $40 Million In Series A Funding, Introduces BNPL Merchant Stock Financing

MarketForce’s Founders Tesh Mbaabu and Mesongo Sibut

African startups continue to wow everybody with their amazing exploits. Compared to the last decade, the amounts these startups reel in during funding rounds have grown astronomically. In fact, the spotlight now stands on African startups as they continue to exceed set milestones and beat old records.

Kenya’s MarketForce, a retail B2B and end-to-end distribution startup founded by Tesh Mbaabu and Mesongo Sibut in 2018 has secured $40 million in a Series A financing round that was led by London and Lagos-based African-focused investment company V8 Capital Partners. The round saw the participation of other investors including Ten13 VC, SOSV Select Fund, Vu Ventures, Vastly Valuable Ventures, Uncovered Fund, Reflect Ventures, Greenhouse Capital, Century Oak Capital and Remapped Ventures.

The round also saw the participation of Ken Njoroge, who will be joining MarketForce’s board as Chairman. Following the round which has an equal amount of debt and equity, MarketForce’s total funds raised sums up to $42.5 million. The Series A round also follows about seven months after the startup raised a pre-Series A of $2 million.

The funds raised will be geared towards its merchant inventory financing and expanding across Africa. The startup is currently present in Kenya, Nigeria, Uganda, Tanzania and Rwanda. The new funds will allow it to offer buy-now-pay-later (BNPL) services to merchants in these countries who need to access FMCGs and want to defer payment. On expansion, the startup is looking at entering countries situated in the eastern and western parts of Africa.

MarketForce’s offerings to merchants are accessible through its app called RejaReja. Using this platform, merchants can source goods directly from manufacturers and distributors, make payments for them and have their orders delivered to them. RejaReja appeared as a product of MarketForce in 2020 as a SaaS product for the formal markets. “The goal of RejaReja is to be the super app of the informal market. We’d like the merchants to have one access point for all the different financial and digital services they need to grow in the digital age”, Tesh Mbaabu said.

As explained by co-founder and CEO Tesh Mbaabu, “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”.

Merchant inventory financing is becoming increasingly popular as it allows merchants to pay for goods at a later date. Tesh Mbaabu also mentioned that stock value more than doubled while the merchant financing option was being tested in a pilot stage. “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”, he added.

Speaking on the financing round, V8 Capital General Partner and member of the MarketForce board, Tobi Oke, said “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”.

Apart from the aforementioned plans, MarketForce plans to at least double its team to 800 as well as increase the number of merchants on its RejaReja platform by 2.5 to 250,000.