The African Fast Moving Consumer Goods (FMCG) market has grown exponentially in recent years, driven by the rapid growth in the continent’s population and purchasing power.
With its latest fundraising round, Kenyan B2B player Marketforce has cemented its place both as a leading retail distributor of FMCG products and as a provider of financial services to the merchants who sell them.
“According to the African Development Bank, 22% of Africa’s working-age population start businesses. This is the highest rate of entrepreneurship in the world, says co-founder and CEO Tesh Mbaabu. “A lot of these traders are informal businesses that need the kind of support we provide to grow.”
Y-Combinator alum Marketforce made history last week by announcing the close of a $40 million Series A round, one of the largest on record for Africa. Lagos, Nigeria-based V8 Capital Partners led the rise.
“This is an important achievement as it shows the maturity of the African tech ecosystem,” Mbaabu said. APN.
” This is just the beginning. I expect to see more African founders accessing capital from African VCs, to solve African problems.
Ken Njoroge, co-founder of Kenyan fintech Cellulant, also participated in the round and joined Marketforce’s board as chairman.
Other new investors who have joined the round include Ten13 VC, SOSV Select Fund, VU Venture Partners, Vastly Valuable Ventures and Uncovered Fund. Existing investors such as Reflect Ventures, Greenhouse Capital, Century Oak Capital and Remapped Ventures also participated.
Financing is made up of equal parts debt and equity. “We took on debt because we believe our business and our model are mature enough to absorb non-dilutive financing, fund loans and some working capital needs,” Mbaabu says.
Founded by Mbaabu and Mesongo Sibuti in 2018, Marketforce now operates in Kenya, Nigeria, Rwanda, Uganda and Tanzania. Its flagship “super app”, RejaReja, facilitates payment and next-day delivery of goods. The startup has also introduced a buy now, pay later (BNPL) model that will allow its growing network of merchants to access and pay for more goods after selling them to end consumers.
More than 100,000 traders and 50 mainstream brands trade on RejaReja, which processes around 6,000 transactions every day. Marketforce plans to grow the number of merchants on its platform to 1 million by the end of 2022.
With this latest funding round, Marketforce plans to scale with its BNPL offering at the forefront. The team’s goal is to expand its influence in the markets it already operates in, while providing more digital financial and banking services through its vast network of merchants. It plans to double its membership to around 800 before the end of this year.
On the vendor side, Marketforce monetizes by providing real-time market information dashboards to FMCGs. Its partners include leading consumer brands and financial services providers such as Nestle, Pepsi, Flour Mills of Nigeria, Bidco Africa, Chandaria Industries, Kapa Oil, Safaricom, Lami and Pezesha.