African e-commerce unicorn Jumia files for US IPO

March 14, 2019 15:32
A Jumia employee at a warehouse in Lagos. The pan-African e-commerce firm makes thousands of deliveries a day in Nigeria alone. Photo: Reuters

African online retailer Jumia Technologies has filed for an initial public offering (IPO) in New York, planning a share sale that could value the firm at US$1.6 billion or more.

If the plans for a listing on the New York Stock Exchange succeed, Jumia will become the first African tech startup to list on a major global exchange, TechCrunch noted.

As one of Africa’s three “unicorns”, or private companies valued at more than US$1 billion, the Nigerian retailer provides an service in the continent, riding on the growing internet access, young population, growing infrastructure investments, and increasing smartphone use in the region.

The Nigeria-headquartered e-commerce platform covers 14 African countries including Ghana, Kenya, Morocco and Egypt, with active customer numbers reaching 4 million as of 2018, up from 2.7 million a year earlier.

In 2018, revenues were 130.6 million euros, up from 94 million euros the previous year. But it has not been profitable yet, with a loss of 170.4 million euros (US$192 million) in 2018, compared with 165.4 million euros in 2017.

Besides e-commerce business, Jumia’s service offerings include food delivery service, travel bookings, real estate, and classifieds. It also runs the JumiaPay payment platform, and a logistics service of trucks and motorbikes.

TechCrunch notes that the startup’s home country, Nigeria, which has the largest population in Africa, is a hub for e-commerce startups on the continent.

“We intend to benefit from the expected growth of e-commerce in Africa through the investments that we have made and the extensive local expertise that we have developed since our founding in 2012,” Jumia said in its filing with the US securities regulator.

The company describes itself as “the only e-commerce business successfully operating across multiple regions in Africa.”

According to the filing, the startup was founded in 2012 by French entrepreneurs Sacha Poignonnec and Jeremy Hodarawith, with the backing of Rocket Internet, an investment firm known for its e-commerce startup portfolios.

Data from Crunchbase shows that Jumia has raised US$767 million since its founding. Its largest shareholder, African mobile operator MTN Group, held 31.28 percent of the company as of the end of December, while Rocket owned a stake of 21.74 percent. Other smaller backers include Goldman Sachs and French insurance company AXA Group, among others.

Rocket Internet, the German-based investment firm known for replicating the business models of US startups in emerging markets, also founded Southeast Asian e-commerce giant Lazada Group. The firm later sold its entire stake in Lazada to Chinese internet and e-commerce giant Alibaba.

Founded in 2007 in Berlin, Rocket Internet has built business units in diverse areas, holding stakes in startups such as food delivery service firms Delivery Hero and HelloFresh as well as online furniture retailers Home24 and Westwing.

It has also set up online fashion retailer Global Fashion Group (GFG), which owns fashion e-commerce platforms such as Zalora in Southeast Asia and The Iconic in Australia and New Zealand. The group reportedly plans to go public, targeting a market valuation of US$2.05 billion to US$2.85 billion.

Last year, as a move to expand its e-commerce empire into South Asia, Alibaba acquired Daraz, another e-commerce platform founded by Rocket Internet back in 2012, which operates in Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal.

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