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MarketForce secures $2M Pre-Series A round, plans to launch in Nigeria and scale up RejaReja in East Africa

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MarketForce Co-founders, Tesh Mbaabu (Left) and Mesongo Sibuti (Right) (Image & Release: MarketForce)

Kenyan-based MarketForce, a B2B platform for retail distribution of consumer goods and digital financial services in Africa, announces a $2 million Pre-Series A round, bringing total funding to-date to $2.5 million. With this fresh round of funding, MarketForce has brought on V8 Capital, Future Africa, Greenhouse Capital, Launch Africa, Rebel Fund, Remapped Ventures, and a couple of strategic angel investors as new investors. They joined Y Combinator and existing investor P1 Ventures, who also participated in the oversubscribed round.

In sub-Saharan Africa, approximately 90% of household retail transactions are in cash, and delivered through a network of about 100 million MSMEs, with 42 million in Nigeria alone. Retail payments on the continent are expected to top $2.1 trillion by 2025, and MarketForce aims to digitize a large portion of these offline transactions.

Co-founded in 2018 by Tesh Mbaabu and Mesongo Sibuti, MarketForce uniquely combines a field sales automation SaaS solution with it’s “RejaReja” B2B marketplace to digitize how informal retail merchants buy and sell FMCGs and digital financial services. RejaReja helps these corner shops, commonly referred to as ‘dukas’ in Kenya, get better service, assortment, and access to new revenue opportunities, outfitting them with the technology and support they need to transform themselves from simple FMCG outlets to comprehensive financial service hubs for the continent’s last-mile communities. Currently available in Kenya, RejaReja offers informal retailers next-day delivery for hundreds of SKUs from the leading FMCG brands.

Last month, MarketForce announced the strategic acquisition of Digiduka, which was formed and funded during the inaugural cohort of the Antler programme in Nairobi. This was a huge fintech step forward as RejaReja now provides a wallet that allows retailers to collect mobile money and bank payments via mobile app, WhatsApp bot or USSD shortcode, eliminating the high mobile money transaction fees and enabling merchants accept digital payments, access working credit and earn more by acting as distribution agents for popular financial services such as airtime, bills, utilities, and even insurance.

With this round of funding, MarketForce plans to launch in Nigeria and to scale up RejaReja to more towns in East Africa.

“We are seeing significant demand for our radically improved way for companies to distribute their goods and services in Africa, and we’re thrilled to get a boost from returning and new investors at this crucial time,” said Tesh Mbaabu, Co-founder and CEO of MarketForce. “The combination of our technology with the offline distribution network that we are building is essential to creating maximum output and impact in African retail distribution. Our goal is to create income growth opportunities for a million retailers and independent sales agents across Africa within the next five years.” 

“Our clients and partners understand MarketForce’s power to increase sales performance and productivity across markets and industries,” said Co-founder and CTO Mesongo. “We are building the operating system for retail distribution in Africa, and we have the right combination of technology and team to make our Pan-African vision a reality.” 

Today, MarketForce clients are able to gain access to both our software and the RejaReja marketplace, which has garnered over 15,000 retail customers, processing thousands of orders daily, and we are experiencing double digit revenue growth month over month. The MarketForce SaaS product on the other hand has garnered over 10,000 monthly active users, with over 300,000 transactions worth over 500 Million USD processed to date through the platform in 3 key markets; Kenya, Uganda and Tanzania. Clients and partners include Safaricom, Pepsi, Grain Industries, Fort Beverages, Madison Insurance, Platinum Credit, Momentum Credit, Letshego, Pezesha and Lami.

A happy RejaReja customer in Nairobi (MarketForce)

“We are glad to be backing MarketForce in this round of funding, given their ability to build a differentiated, powerful and all-inclusive digital commerce platform for informal retailers in Africa. Similar to Paystack, another successful African YC company who targets merchants selling online, RejaReja targets the millions of underserved informal merchants who are still offline when it comes to business automation and payments,” said Tobi Oke, Managing Partner at V8 Capital Partners. 

“We are proud to back MarketForce to build the future of retail in Africa and help catalyze the digitization of the African retail market, which is highly informal, fragmented and undigitized, but holds a lot of untapped potential to improve incomes and enable millions of African retailers to grow their businesses. MarketForce sits in a place that enables them to generate a lot of value and empower every single participant in the massive retail industry,” said Adenike Sheriff, Principal at Future Africa. 

“We are excited to strengthen our partnership with MarketForce,” said Mikael Hajjar, Managing Partner at P1 Ventures. “MarketForce is one of the fastest-growing African leaders in sales and distribution automation technology. We’ve witnessed the pain point that MarketForce’s product addresses and how its customers realize major productivity gains over substitutes.” 

“I have known Mesongo and Tesh for over two years and MarketForce has proven that they know how to leverage the entire retail supply chain as a gateway for digital payments. Their organic as well as acquisition-driven growth & expansion strategy thus far has proven that their understanding of unit economics and marginal customer acquisition costs is solid. As a pan-African fintech company, they are very well positioned to tap into the $700 billion that gets transacted in this space every year,” said Zachariah George, Managing Partner at Launch Africa. 

 

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Dream VC applications: A peek behind the scenes

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Dream VC breaking down the numbers and representation in its programs

A year ago, Dream VC quietly launched its first inaugural cohort applications with the hopes of closing the investing knowledge gap for check-writers and ecosystem builders across the continent. Fast forward one year later, they have received an overwhelming amount of interest from people curious about investing and contributing to the African startup ecosystem. Across two cohorts alone, they have processed more than 2000 applicants from 30 African countries. With fellows dialing in five continents and multiple time zones.

That being said, they’d like to share some interesting findings they have extracted and learned from the whirlwind that Dream VC has been in from last year to now.

Cohorts

By the end of 2022, Dream VC will have 2 cohorts under its belt with 3 programs run. There has been an increase in total applications despite the difference in price point between the 2021 program and this year.

Raw Aggregation of Dream VC Applications 2021 vs 2022

Breakdown Of The 2021 Cohort

For its inaugural cohort, they received a total of 1002 applications and had an intake of 31 fellows, with an acceptance rate of 3%. The average age of its fellows was 25, with most being in their mid-twenties to late twenties. And exploring VC as a new career pivot after a few years of full-time work experience. After 4 months of rigorous and community-driven engagements, a total of 19 Fellows graduated from the program with an issued certification.

When looking at the specific demographics of Dream VC’s inaugural fellows, findings show that 90% of the fellows were homegrown. Which they classified as having been born, raised, and educated on the continent. They also had 12 African countries represented and 16 different Nationalities in total.

List of countries represented by Dream VC 2021 Applicants

Although its initial intake consisted of 33% women, the final certified graduating fellows consisted of 60% women. Meaning that all of the female fellows who joined the fellowship finished the program.

This is a strong indication of the perseverance of its female fellows in particular. And they are committed to making a strong push to convert more women into its talent pipeline. Especially given that only 15% of the 2021 applicants identified as female. At Dream VC, they urge more women to apply for its programs and also reapply for future cohorts if they were not accepted initially.

Breakdown Of The 2022 Application Cycle

For 2022, Dream VC opened its applications on March 8th and had then remained open for over a month and a half until its final deadline on May 1st. In total, they received a total of 1,375 applications for its Launch into VC (“LIVC”) and Investor Accelerator (“IA”) programs.

Aggregate breakdown of 2022 Applicants across “LIVC” and “IA” programs

Around 81% of the total applications were for our Launch into VC fellowship, and the remaining 19% were for the Investor Accelerator. We received a total number of 1,113 applications for Launch into VC, and 262 for Investor Accelerator.

Gender Breakdown

Aggregate breakdown of 2022 Applicants, by Gender, across the “LIVC” and “IA” programs and in total

Out of the total applications for 2022, 31% of the applicants identified as female. When taking a closer look at the gender breakdown for each program, Investor Accelerator had a higher percentage of female applicants with 37% of total Investor Accelerator applicants, while Launch into VC had 29%.

Nationality Breakdown

Aggregate breakdown of 2022 Applicants, by Nationality, across the “LIVC” and “IA” programs and in total

When reviewing the nationalities of the applicants, it was found that for 2022, Dream VC has exponentially expanded its reach of applicants in both nationality and location. However, most of the applicants are still overwhelmingly from the continent and diaspora, which accounts for 86% of the total applicants. The remaining 14% hail from non-African countries such as India, Singapore, and Germany with non-African backgrounds.

Aggregate breakdown of 2022 Applicants, by Nationality. Important Note: 25 Other Countries Represent the Other 10.36% Not Shown On Graph.

When looking more closely at each program, 87% of the applicants for Launch into VC applicants were homegrown or African diaspora, compared to 83% of the Investor Accelerator applicants. This year saw 30 different African countries across the continent represented. With a majority of the applicants coming from Nigeria (43.7%), followed by Kenya (10%), Rwanda and South Africa (3.9% each respectively), Ghana (3.6%), Uganda (3.2%),  Zimbabwe (2.9%), and Tanzania (2.3%).

List of countries represented by Dream VC 2022 Applicants

Interestingly, the country represented the most by the diaspora applicants was Cameroon, followed by Nigeria, across both programs.

Across the different African regions, West Africa took the lead in applicants with over half of the applicants hailing from the region (58%)East Africa contributed to another quarter with approximately 29% of applicants coming from the area, followed by Southern Africa (6%)Central Africa (4%), and finally North Africa (2%). Dream VC’s footprint can still be solidified further, particularly in the ecosystems in North Africa, and its team will be traveling actively to Egypt, Morocco, and Tunisia to build relationships there.

Locations Breakdown

List of non-African countries represented by Dream VC 2022 Applicants.

When looking at the locations of applicants applying from outside the continent (including diaspora and non-Africans), over 50% of them applied from the United States and the United Kingdom. Dream VC also saw an increase of Indian and Singaporean applicants from Asia. And a spread of interesting European countries including Belgium, Belarus, Germany, France, Finland, and Sweden.

Closing Remarks & Reflections

Since launching Dream VC in 2021, the team has been endlessly grateful for the overwhelming interest from the African & International community. As well as the selfless support that has been extended by various ecosystem partners and connections in our network.

Its application cycles have revealed several interesting insights into where the strong interest can be found in various startup ecosystems. As well as certain areas we are endeavoring to have better reach in (ex: North Africa and Arabophone countries).

They also strongly encourage more female applicants to apply AND reapply to its programs. As they are strongly committed to building out the opportunity and talent pipeline for black women in particular focused on investing in Africa.

 

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Base10 Partners Led By Adeyemi Ajao Becomes First Black-Led VC Firm To Cross $1 Billion AUM With New Fund

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Base10 Partners co-Founder and CEO, Adeyemi Ajao (Source Adeyemi Ajao Image: Base10)

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BluePeak Private Capital Announces Its Second Investment in ieng

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BluePeak Private Capital Founder and Managing Director, Walid Cherif 

BluePeak Private Capital, an alternative asset management firm with a strong focus on impact in Africa today announced its investment in ieng. A pan-African provider of engineering and construction, operations and maintenance. And hybrid power solutions to Africa’s burgeoning telecom sector.

The $20 million growth capital supports ieng’s geographic expansion plan across the continent. Enabling the company to provide innovative and cost-effective solutions to a broader range of clients and industries. Solidifying its position as a leading provider of end-to-end infrastructure services and cutting-edge solutions. In addition, the investment advances ieng’s strategy to meet growing consumer demand for telecom infrastructure services, boosting connectivity for last-mile access and deepening the firms’ footprint by providing catalytic capital for new contracts with blue-chip clients.

Rami Matar, Partner at BluePeak Private Capital, commented: “Through reliable services and a strong track record, ieng has managed to position itself as a preeminent service provider to blue-chip telecom clients in Africa. Competing head-to-head with global service providers. We are excited to support ieng and fund its growth plans as development in telecommunications narrows the gap in Africa’s digital divide and is a critical enabler of economic development, productivity, and inclusive growth.”

Rami Shibley, Founder, and CEO of ieng said: “We are excited to start this long-term partnership with BluePeak t support ieng’s continuous growth and development. The investment provides critical capital, enabling ieng to meet the increasing demand for reliable telecom services, improved connectivity, and more efficient power solutions”.

Established in 2007 in Ghana, ieng gradually expanded its operations and is today a prominent service provider to
blue-chip tower companies and mobile network operators across Africa. Over the years, the company has developed
an extensive track record and currently maintains a portfolio of more than 23,000 towers on behalf of clients in
growing economies across the continent including Nigeria, Ghana, Kenya, Uganda, the Democratic Republic of
Congo, and beyond. Further, ieng has established an in-house hybrid power solution to reduce carbon emissions of
telecom towers through transformative means.

The telecommunications sector is poised for onward growth in Africa, on the back of:

(i) growing mobile penetration.

(ii) increasing number of internet users.

(iii) the rollout of 4G and 5G towers to improve and expand the quality of connectivity.

ieng is well-positioned to leverage its competitive geographic reach and long-term relationships with
clients to capitalize on the market opportunity and further scale its operations.

The investment is aligned with the Fund’s impact agenda and will support ieng in strengthening mobile and internet connectivity and promoting evolutionary hybrid power solutions. BluePeak’s $20 million investment promotes UN’s Sustainable Development Goal 3 Good Health and Well-being. Goal 5 Gender Equality, Goal 7 Affordable and Clean Energy, Goal 8 Decent Work and Economic Growth, and Goal 9 Industry Innovation and Infrastructure.

 

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