Jumia: Africa's First Billion-Dollar Unicorn Files For Its IPO

Mar. 18, 2019 7:15 AM ETJumia Technologies AG (JMIA)RCKZF5 Comments
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Summary

  • African e-commerce company, Jumia, just filed for a $100m IPO on the NYSE, but will probably seek even more funding.
  • The companies revenues are growing, but it's still unprofitable.
  • Jumia is sometimes called the Alibaba of Africa. Does it live up to it's name?
  • China's tech IPOs are all the rage, but could Africa could be a great opportunity too?

LOGO

Introduction

According to documents filed on March 12th, Jumia (NYSE:JMIA), Africa's first company with a $1B+ valuation, is planning to raise $100,000,000 via IPO on the NYSE. Many see this as a good way to enter the hot African tech market, and bank on the continents economic growth. However, investing in Jumia's IPO doesn't come without its share of risks and considerations. Let's discuss.

The Company

Jumia is an African ecommerce company that is very similar to Alibaba (BABA) of China, and MercadoLibre (MELI) of South America. They are the the leading pan-African e-commerce platform and offer a B2C marketplace, logistics service and payment service, each with major potential for growth.

The company was founded in 2012 by Jeremy Hodara and Sacha Poignonnec, two ex-McKisney employees, along with Tunde Kehinde and Raphael Kofi Afaedor, and backed by Rocket Internet (OTC:RCKZF) (they own 21.7% of the company). The largest shareholder is MTN Group Ltd., a telecoms company.

In 2016, it garnered "Unicorn Status", after Goldman Sachs bought a bought a stake and valued at about $1.2 billion. Now in 2019 they are breaking records again -- this time the first African tech startup to list on a major global exchange.

Headquartered in Nigeria, they operate in 6 regions and 14 African countries, including Kenya, Ghana, Ivory Coast, Egypt and Morocco.

LOGO

The vertically integrated company offers three main services (with dozens of sub-services): A B2C Marketplace, a Logistics Company, and a Payments Platform.

Marketplace (Link)

The B2C marketplace allows African sellers to connect with consumers across the continent. It follows a "middleman" mentality; over 90% of sales were by third parties who manage their own inventory. The remaining 10% is sold directly by Jumia in key categories and regions.

(Marketplace.)

On the marketplace, they had a total of 81,000 Active Sellers and 4

This article was written by

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WappCap is a stock analysis and research company headed by James LePage (Co-Founder of ShareClub), alongside a team of financial professionals. We write about undervalued, unknown stocks with high return potential. Our articles are meticulously crafted to help you make the decision to invest (or not) in a security, utilizing original analysis, valuation models, and industry experience. Check out our TipRanks analyst rating - we're currently near the top 100 analysts out of over 6,000, and have a return rate of over 30% in 1 year!

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