Young Kenyan who earned a place on Forbes honours list
Mesongo Sibuti and Tesh Mbaabu, the co-founders of MarketForce.
As Sauti Sol delivered a rousing performance during the four-day Forbes 30 Under 30 Summit Africa in Gaborone, Botswana this week, attended by Deputy President Rigathi Gachagua, Mutethia Mbaabu was on a plane to Tokyo.
The summit, which also marked the celebration of Forbes Africa 30 Under 30 Class of 2023, convened the world’s most elite young entrepreneurs and game-changers to exchange energy juices on entrepreneurial capitalism, with this year’s theme centred around technological innovation.
Mbaabu, or simply Tesh, was the only Kenyan honoured in this year’s Forbes Africa 30 Under 30. In 2008, while the world gaped over Facebook, the new fascinating social media platform at the time, the University of Nairobi computer science graduate had many questions.
“Who built this platform? How can I build something similar but one that offers business solutions?” he wondered.
A vision formed and the 30-year-old set out to build something as impactful as the Meta platform but specific to Africa.
Learning anything and everything about building startups, from biographies, business journals to profiles of top entrepreneurs, Tesh and a partner conceived MarketForce, a fintech platform that earned him a place in the Forbes Under 30 list of 600 young tech-savvy entrepreneurs from around the world.
The fintech serves five African markets - Uganda, Kenya, Tanzania, Rwanda and Nigeria - with over 300 employees and Mbaabu as its chief executive officer.
In February 2022, MarketForce raised US$40 million (Sh5.3 billion) in capital investment, something Tesh describes as “not a walk in the park”.
But how did he get here?
Describing himself as an average student, Tesh grew up on the outskirts of Nairobi. “I grew up in Ngong, my parents worked in the CBD then, and my family was a middle class one. Going to school, I was an average student. That explains why I joined Mutungoni Academy in Athi River for my high school,” Mbaabu said in an interview with Saturday Nation.
When he joined the University of Nairobi in 2008, Mbaabu had set his eyes to pursue a degree in architecture.
“Initially that is what I thought I would study because, since my time in high school I knew I wanted to go into a creative space due to my passion for design. But at some point I learnt about Facebook. There was so much hype around it at the time. I was so fascinated by the platform and it is at that point that I made a career switch to become a software engineer so that I could build something like Facebook.
In 2011, Tesh jumped ship and enrolled for a degree in computer science. That’s when he met Mesongo Sibuti, a techy as well, and together they co-founded MarketForce.
“I spent most of the time in the streets away from class, hustling. I was already good at coding and programming, something I had started learning back in 2008. I spent most of the time looking for web design gigs for small companies which were never short because the awareness about online had begun to increase. Social platforms doing business had started to become a thing as well and at that point I realised my passion was now at the intersection of technology and business. So mine was, how do I help medium sized businesses get into the digital space, sell more and attract more customers? That became my main hustle in campus,” the soft spoken lanky programmer continued.
A majority of gigs Tesh landed were to build websites for small companies as everyone, for fear of missing out, strived to go digital.
“Most companies would pay between Sh8,000 to Sh30,000 and I kept graduating as I also got better with experience and started attracting bigger clients. I remember one client paying me Sh200,000. You can imagine how big that was for someone still on campus,” Tesh says with a cheeky laugh.
With the constant cash flow seemingly not drying out from the gigs, at some point Mbaabu wanted to drop out of school for good.
“I was already making so much money and I felt I was wasting time studying. I remember telling my dad that I wanted to quit and do business because clearly I had the favour of the gods. I told him with coding I didn’t need to go to class, I could always improve by learning online. If anything I had started taking care of myself,”
But it would take one with enough guts to communicate such a silly decision to a professor and Tesh was bold enough to convey his intention to his father, who recently retired as a university lecturer.
“He wasn’t happy at all, you can imagine telling a professor that you intend to drop out of school because you are making money.”
His father’s wisdom in handling the matter prevailed convincing his son to stay on course until he graduated in 2015.
“I am a strong willed person, I guess I got it from him and he knew if I made up my mind there was no turning back and so he was smart about it. He requested that while I continue with my money-making ventures, I complete the degree regardless of the grades I score,”
When Tesh met Sebuti as a freshmen (first year students), they clicked and became immediate friends with similar passion.
“We did the hustling together. Once we understood how the business works, we built a consulting business graduating from just building websites to building software applications for even bigger companies and at that point we started attracting bigger projects. By bigger I mean multi-million shilling projects to build mega software and execute them, so we put up a team,”
One client, an international Non-Governmental Organization, paid them Sh2 million to create a software that digitised the NGO’s internal processes.
Another similar big gig came from one of the government parastatals after winning a tender, cutting them a cheque of Sh6 million and another big one was a Sh10 million paycheck from a Micro Finance that sought an application that would ease how the entity processed loans for its clients.
“This huge deals came fresh from us having graduated from university between 2015 and 2017 and that’s how we kept growing and, based on our skills, our rate card also changed. If we were to do the projects again, we would charge five times the amount,” laughs.
I ask how they were able to ensure they never missed a gig at any given time.
“Two ways, one was applying for tenders and secondly was networking. We got a lot of jobs from networking relationships,”
During this period, the two geeks also built a startup, Cloud9xp, a travel technology company that they later sold to HotelOnline for millions of shillings.
After the sale of Cloud9xp, in late 2018, they set out to build another startup, MarketForce.
“Having consulted for large companies, we realised that there were many SMEs and micro enterprises, I call them ‘dukas’ (merchants), that had a similar problem. Their businesses lacked reliable information on the performances of their field sales teams, products and services in their market not only in Kenya but Africa, and knowing that these small businesses are the highest contributors of GDP because most people are not white collars, we wanted to offer a solution. So we came up with this idea of transitioning from these big businesses that can survive without us, and scale this big technology we have built for the big companies, for much smaller businesses, the likes of dukas and mama mbogas, who need us more because no one is serving them, hence MarketForce”
How the platform works is a two way functional unit. One, it is a B2B e-commerce platform (business to business service) enabling the small businesses to use our Rejareja App to order for their goods which are delivered within 24 hours. The second solution is enabling book and stock keeping as well as facilitation of credit advancements by banks which have partnered with the fintech, to the merchants. Currently MarketForce has over 200,000 merchants and 50 consumer manufacturers trading on the platform.
Even though Tesh says the business is not yet profitable, he agrees to the fact that the business growth has been tremendous and fastidious in its five years of existence.
“The reason for that is because we took a different path into entrepreneurship, which is the Silicon Valley type of growth model, where you raise venture capital (VC) to gain market share and then you turn into profitability after gaining the market share. This is what we have done in the last three years”
What this means is, going round pitching and looking for investors who pump money into the startup businesses, in return for a stake into the business.
These investors are always from well-off investors (angel investors), or investment institutions.
“These are institutions that are similar to banks but focus on backing startups that have high potential to grow. They give you funding based on an idea and a strong business model and a strong team that can execute the idea and the model. This is how companies like Google, Netflix grew very fast by building a market then raising venture capital.”
When MarketForce first started, the growth was slow, the sale cycle slacked and venture capital funding proved elusive.
“We bootstrapped for a year before finally convincing friends, family and angel investors to invest US$200,000 (Sh27 million) in 2020 which for most of them was the first time venturing into venture capital.”
They would raise another US$300,000 to make it a total of US$500,000 (Sh68 million) for 2020. In 2021, MarketForce was able to raise a further $2 million (Sh267 million) in VC to expand into other countries and a further US$40 million (Sh5.3 billion) in 2022.
Despite raising these colossal amounts, Mutethia says it’s a risky venture. “Unlike the traditional way where you start a business and gradually build it using profits generated, the silicon valley model requires you to seize some shares of your company to the investors. It is all about making sacrifices. The idea is owning a smaller part of the large pie rather than owning 100 per cent of the business.
