Y Combinator-backed Kenyan retail startup Marketforce has announced the shutdown of its e-commerce arm RejaReja.
The company’s co-founder, Tesh Mbaabu, via a blog post, disclosed that the shutdown was due to struggles with profitability.
He cited that before the shutdown of RejaReja, the B2B distribution business became unsustainable for a few reasons such as funding challenges, the retail FMCG market having razor-thin margins, and being highly price elastic which was ravaged by consistent price wars.
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He wrote,
“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. That’s always a race to the bottom.
“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.”
MarketForce’s deceleration started last year when some Venture Capitalist reneged on their Series A funding commitments, forcing the company to scale down operations and conduct multiple rounds of layoffs. The cash crunch came amidst the global venture capital downtime that has made raising funding hard.
This forced the company in October 2023, to discontinue the operations of its e-commerce platform RejaReja in four markets which include Kenya, Nigeria, Rwanda, and Tanzania, before its final shutdown this year.
Launched in 2020, RejaReja was built to empower one million merchants to harness the power and scale of the technology and realize their maximum potential by 2030. The company was trying to solve challenges that retailers face like stockouts, earnings instability, and lack of financing to scale their trade.
Moving ahead, rather than starting from scratch, the company has decided to join forces with founders that had built a business focused on a different kind of merchant, an online merchant selling a lot via social platforms.
The company is pivoting to “Chpter”, a social commerce startup that provides an AI-driven conversational platform tailored for business owners on WhatsApp and Instagram.
Chpter empowers businesses to unlock more revenue through the fastest-growing commerce channel, social media. It provides an AI-powered conversational commerce platform that enables merchants to sell more on social platforms like WhatsApp and Instagram by automating conversations, marketing, and payments all in one place.
MarketForce disclosed that they are building a product for merchants who want to grow their businesses and make money even while asleep and believe they can do that through the power of automation and artificial intelligence.
Notably, Chpter is already live in Kenya and South Africa, powering hundreds of merchants and assisting them in seeing up to 5x revenue growth across their social channels due to the power of conversational commerce.