Kenya’s Pezesha and MarketForce settle dispute following a 6-month legal battle

April 8, 2024
2 min read
MarketForce co-founders
  • Following a six-month legal battle, Kenyan fintech startup Pezesha and MarketForce, a B2B eCommerce platform, reached an out-of-court settlement. MarketForce will use its intangible assets valued by Pezesha to settle the debt. 
  • This development comes after Pezesha filed a petition to liquidate MarketForce, a B2B eCommerce platform, due to "outstanding debts," just two years after the two companies collaborated to improve customer inventory and distribution.
  • According to Pezesha's liquidation petition, MarketForce owes the company a significant amount and intends to recover the unpaid debts through legal action.

The two companies are said to have settled their legal dispute four months after it began. They agreed to meet at the Harambeans Global Summit in Maasai Mara in March 2024, where Hilda Moraa, founder of Pezesha, and Tesh Mbaabu, CEO of MarketForce, discussed their differences and eventually reached an agreement to resolve them.

Before [the legal dispute, Pezesha provided merchant lending to MarketForce's retailers, later expanding its services to include a working capital facility. However, as MarketForce faced funding challenges, it became increasingly difficult to meet its debt obligations, causing tensions between the two companies.

On September 25, 2023, Pezesha filed a liquidation lawsuit against MarketForce to settle outstanding debts after it became evident that the company was unable to meet its financial obligations. 

Meanwhile, MarketForce's funding challenges and market complexities, combined with Pezesha's pressure from investors and board members, are expected to lead to a legal confrontation between the two companies.

In his reaction, Mbaabu expressed that his company “underestimated the challenges of scaling and could have communicated better with Pezesha during our funding setbacks.” 

“We’ve learned the importance of resilience and adaptability in navigating challenges, and we’re committed to fostering a culture of cooperation and trust moving forward,” Mbaabu added, 

Meanwhile, Moraa believes that the two companies could have handled the situation more diplomatically and sought alternative solutions before resorting to litigation.

 “This episode has taught us the value of open communication and the need to prioritise relationships over disputes.”

Pezesha recently received a $500,000 grant from the US International Development Finance Corporation (DFC). The fund will enable the startup to use data science, machine learning, and other advanced computing technologies to streamline lending capabilities and enhance its long-term lending practices to small businesses in sub-Saharan Africa.

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