Marketforce ordered to pay $16,000 (KES 2.1 million) to a former employee for wrongful termination by a Kenyan court.
The ruling comes nearly a year after the Y Combinator-backed startup shut down RejaReja, its flagship B2B marketplace, leaving its future uncertain. Its co-founder, Tesh Mbaabu, has since moved on to launch a social commerce platform, Chpter.
Tom Maina Chege, a former product manager who worked at Marketforce from January 2022 to August 2023, filed the case in October 2023. Chege, whose monthly gross salary was KES 200,000 ($1,550), was laid off in July 2023, with his termination taking effect in August.
He argued that the redundancy was unlawful, as “the notice period of 30 days did not lapse before the redundancy took effect”, and Marketforce failed to notify the Labour Office, a requirement under Section 40 of the Employment Act, 2007.
Chege sought KES 1,560,870 ($12,000) in compensation for unpaid leave, notice pay, severance pay, salary arrears, and general damages, according to court documents seen by TechCabal.
After Marketforce failed to defend the suit, Judge C.N. Baari ruled that the redundancy was procedurally and substantively unfair. The court awarded Chege KES 1,316,547 ($10,000) in terminal dues and KES 800,000 ($6,000) in compensation and legal costs.
“[Marketforce] did not attempt to comply with the seven steps set out in Section 40(1) of the Employment Act, 2007,” the ruling stated.
Staff exits and pay cuts
The judgment sheds light on Marketforce’s internal troubles, which three former employees say began with mass staff exits in late 2022 and 2023. The company lost key employees, which affected operations and strained relationships with major distributors.
“Marketforce had a credit line with major manufacturers, which enabled them to get stock and pay later,” a former employee who asked not to be named told TechCabal. “This was ended when we started having issues, and employees who were the glue holding the deal left.”
At the same time, Marketforce faced severe cash flow problems, resulting in salary delays and pay cuts of up to 50% for non-tech employees.
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Despite raising over $40 million from investors such as Reflect Ventures, Greenhouse Capital, and Century Oak Capital, the company’s abrupt exit from the B2B e-commerce space in 2024 left its current status unclear.
While Marketforce’s fate hangs in the balance, co-founder Tesh Mbaabu has shifted his focus to Chpter, a platform helping businesses sell via social media.
In September 2024, Chpter closed a $1.2 million pre-seed round led by Pani, an Africa-focused investment firm co-founded by former Cellulant CEO Ken Njoroge. The company is also part of the Safaricom Spark and Norrsken Accelerators.
Whether Marketforce can revive itself and stage a comeback remains to be seen.
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