Facing harsh economic realities, Kenyan B2B e-commerce startup MarketForce has announced plans to exit three African markets and launch a social commerce spinout called Chpter. The strategic pivot spotlights the company’s drive to enhance profitability amidst a global venture capital slowdown.
MarketForce launched in 2018 and expanded rapidly across five African countries, offering digital procurement and last-mile fulfillment to retailers. But as macro conditions darkened, raising capital became increasingly difficult, forcing the company to focus on sustainable economics.
This ultimately compelled MarketForce to exit Kenya, Nigeria, and Rwanda to reduce costs and liabilities. The startup’s asset-heavy operating model had also proven capital-intensive, creating an urgent need to optimize profitability.
According to MarketForce co-founder Tesh Mbbuu, the exits will enable directing resources into the most promising avenues for transformative impact. The company remains committed to upending traditional distribution in Africa despite exiting these markets.
A core part of its updated strategic roadmap is spinning out Chpter, a social commerce enabler allowing retailers to leverage conversations on social platforms to drive sales. The new entity taps into the meteoric rise of social shopping, especially in emerging markets.
In Africa, social media has become a dominant conduit between merchants and consumers. Chpter aims to provide the missing commercial bridge between engagement and transactions.
The spinout also aligns with a broader industry pivot towards more targeted digital selling driven by analytics and automation. MarketForce plans to double down on empowering the next generation of retail powered by data-driven insights.
As Mbbuu notes, the company spent its first years pursuing user acquisition but must now transition to metrics like return on investment as benchmarks. This entails focusing innovation and sales efforts only on areas demonstrating a viable path to profitability.
MarketForce’s journey mirrors the reckoning underway at high-growth startups unable to raise ample late-stage capital in the current climate. But its willingness to make tough choices to stay solvent is admirable when similar companies continue burning cash in denial.
Looking ahead, MarketForce aims to continue disrupting antiquated retail supply chains in Africa with enhanced financial discipline and targeted bets. If executed skillfully, MarketForce could still achieve mainstream adoption and profitability over a longer time horizon.
By taking its destiny into its own hands, MarketForce has a fighting chance to build a sustainable business able to weather industry storms. With consumer habits rapidly evolving, the company’s makeover should allow it to remain locally responsive and innovative.
In challenging times, focusing on enhancing value and service to core customers represents the wisest course. MarketForce’s exits and spinout demonstrate a pragmatic understanding of what’s required to transform African commerce for the long haul.
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