Business Maverick

Jumia Surges on U.S. Debut as Africa’s Amazon Goes Public

By Bloomberg 15 April 2019

Jumia Technologies AG shares soared by 75% on their first day of trading in New York, as investors rushed to buy into the company’s plans to extend online shopping services across Africa.

Jumia Technologies traded at $25.46 as of 4:34 p.m. local time on Friday, valuing the company at more than $1.9 billion. Jumia earlier raised $196 million with the sale of 13.5 million American depositary receipts at $14.50 each.

The listing caps seven years of growth for Jumia, which was founded by 38-year-old French entrepreneurs Sacha Poignonnec and Jeremy Hodara in 2012 and now has more than 4 million customers in 14 African countries. While the retail platform isn’t profitable, sales jumped by almost 40 percent last year to 130.6 million euros ($147.3 million)

“This is about awareness,” Poignonnec said in a phone interview. “Millions and millions of Africans are yet to realize the benefits of e-commerce.”

The company has headquarters in Berlin and got early funding from German startup incubator Rocket Internet SE, while its biggest shareholder is MTN Group Ltd., Africa’s largest mobile-phone company. More recent investors include French drinks maker Pernod Ricard SA and Mastercard Inc., which put in a combined 125 million euros in the build up to the initial public offering.

Often tagged Africa’s Amazon.com, Jumia operates in countries such as Nigeria and Ivory Coast where the U.S. giant lacks distribution infrastructure and much presence. The company has developed a logistics arm that includes pick-up and drop-off points to combat vague addresses, and also lets customers make mobile-phone payments if they don’t have access to banking services.

“It’s an opportunity for retail investors to buy the Africa growth story, the story of a growing consumer class,” said Steven Grin, managing partner of Lateral Capital, a New York-based investment company focused on Africa. “Rising per-capita incomes, an increasingly young and urban population, falling internet and data costs, surging mobile-phone penetration — these favorable long-term trends underpin the rise of the African online consumer.”

The offering was led by Morgan Stanley, Royal Bank of Canada, Citigroup Inc. and Berenberg Capital Markets LLC. Citadel Securities was the designated market maker.

Poignonnec and Hodora met while colleagues at McKinsey & Co., with the former spending time in Ivory Coast working for the U.S. consultancy.

“E-commerce is becoming very big everywhere,” Poignonnec said. “We looked at the opportunity in Africa. It’s a big opportunity to help buyers and help sellers.”

Gallery

Want to watch Richard Poplak’s audition for SA’s Got Talent?

Who doesn’t? Alas, it was removed by the host site for prolific swearing*... Now that we’ve got your attention, we thought we’d take the opportunity to talk to you about the small matter of book burning and freedom of speech.

Since its release, Pieter-Louis Myburgh’s book Gangster State, has sparked numerous fascist-like behavior from certain members of the public (and the State). There have been planned book burnings, disrupted launches and Ace Magashule has openly called him a liar. And just to say thanks, a R10m defamation suit has been lodged against the author.

Pieter-Louis Myburgh is our latest Scorpio Investigative journalist recruit and we’re not going to let him and his crucial book be silenced. When the Cape Town launch was postponed, Maverick Insider stepped in and relocated it to a secure location so that Pieter-Louis’ revelations could be heard by the public. If we’ve learnt one thing over the past ten years it is this: when anyone tries to infringe on our constitutional rights, we have to fight back. Every day, our journalists are uncovering more details and evidence of State Capture and its various reincarnations. The rot is deep and the threats, like this recent one to freedom of speech, are real. You can support the cause by becoming an Insider and help free the speech that can make a difference.

*No video of Richard Poplak auditioning for SA’s Got Talent actually exists. Unless it does and we don’t know about it please send it through.


Comments

Please note you must be a Maverick Insider to comment. Sign up here or if you are already an Insider.

BUSINESS MAVERICK

SA Reserve Bank holds rates, signals a cut on the horizon

By Ed Stoddard