Kenyan B2B e-commerce company MarketForce is winding down its B2B e-commerce business that served informal merchants (mom-and-pop stores) after a turbulent two-year period that saw it scale down operations severely.

The shutdown of the B2B e-commerce arm dubbed RejaReja comes months after MarketForce withdrew the service from all its markets, including Nigeria and Kenya, save for Uganda.

RejaReja was intended to enable informal retailers to order fast-moving consumer goods (FMCGs) from distributors and manufacturers, solving several challenges encountered by informal retailers such as stockout and financing. The marketplace, launched in 2020, hoped to tap the informal retail sector in the continent, which accounts for about 80% of household trade in sub-Saharan Africa.

At its peak, it employed more than 800 people and served 270,000 informal merchants. MarketForce had raised $42.5 million, including $40 million debt-equity in a Series A round in 2022 at over $100 million valuation, to fuel the business.

However, a mix of challenges — including aggressive expansion, a capital-intensive business model, razor-thin profit margins and a funding crunch after an investor reneged on their promise — made the business hard to sustain, leading to the closure. Several B2B e-commerce companies in Africa have also scaled back operations as the funding crunch persists.

“The B2B distribution business that was RejaReja became unsustainable for a few reasons. Firstly, the retail FMCG market has razor-thin margins, which means that at a unit level, we struggled with profitability. The segment is also highly price elastic, which means the price wars are consistent,” said Tesh Mbaabu, who co-founded MarketForce in 2018 with Mesongo Sibuti.

“After immense efforts to make our business model sustainable, including downsizing the business to extend the runway for as long as possible, we have concluded that it is no longer feasible to keep RejaReja operational.”

Its investors include Y Combinator (YC S20), V8 Capital Partners (which led the Series A round), Ten13 VC, SOSV Select Fund, VU Venture Partners, Vastly Valuable Ventures, Uncovered Fund, Reflect Ventures, Greenhouse Capital, Century Oak Capital and Remapped Ventures.

After the close of RejaReja, MarketForce is launching Chpter, a social commerce spinout that Mbaabu describes as an AI-powered conversational commerce platform that enables merchants to sell on social platforms.