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African ecommerce giant Jumia has filed with the US Securities and Exchange Commission (SEC) to launch an initial public offering (IPO) on the New York Stock Exchange (NYSE), despite reporting losses over the past two years.
Jumia was founded in 2012 by Frenchmen Jérémy Hodara and Sacha Poignonnec. The company made history in 2016 when it got a valuation of just over $1-billion after it raised $326-million from investors who included US investment bank Goldman Sachs, MTN, Rocket Internet and AXA Insurance — effectively making it Africa’s first unicorn.
While the firm on LinkedIn states that it is based in Lagos, in its filing — made on Tuesday — it has it that the company is based in Berlin, Germany (home of Rocket Internet).
Jumia’s Securities Exchange Commission (SEC) filing mentions that the IPO will be led by Berenberg, Citigroup, RBC Capital Markets, and Morgan Stanley.
As of December last year, Jumia had accumulated losses of €862-million
A BBC report yesterday said the company could likely launch its IPO next month.
Jumia, which has operations across 14 countries on the continent, has diversified its services to include a vehicle as well as a property marketplace, food delivery, classifieds, online hotel bookings and a flight marketplace.
The firm grew its active consumers from 2.7-million in 2017 to 4-million in 2018, but despite this, it has been unable to turn a profit.
Losses raise concern
According to Jumia’s IPO prospectus, last year the firm reported a loss of over $195-million (on revenue of $149-million). In 2017, Jumia reported a loss of €165-million — about $187-million (on revenue of €94-million — about $106-million).
“As of December 31, 2018, we had accumulated losses of €862-million,” the firm said in the filing.
“There is no guarantee that we will generate sufficient revenue in the future to offset the cost of maintaining our platform and maintaining and growing our business.
“Furthermore, even if we achieve profitability in certain of our more mature markets, where e-commerce is growing rapidly, there is no guarantee that we will be able to break-even and achieve profitability in other markets, where e-commerce adoption is slower,” the firm added.
Will main investors sell shares?
SA tech site Tech Central reported yesterday that MTN –Jumia’s largest shareholder with its 29.7% stake in the firm — had identified Jumia as one of the assets it could sell as part of the telco’s R15-billion asset disposal plan.
Ventureburn this morning also asked another of Jumia’s biggest shareholders Rocket Internet — which owns a 20.6% stake — if it plans to sell its shares in the firm when it goes public. However Rocket Internet had not responded by the time of publication.
Editor’s note (4 April 2019): An amendment to Jumia’s filing issued on 28 March states that Jumia has been approved to list on the NYSE under the “JMIA” symbol. The firm is offering 13 500 000 American Depositary Shares (ADS) — representing 27 000 ordinary shares. In the filing Jumia anticipates the IPO price of the ADS will be between $13 and $16 per ADS. In addition, the amendment states that Mastercard Europe has agreed to purchase €50-million of Jumia’s ordinary shares in a concurrent private placement at a price per share equal to the euro equivalent of the initial public offering price per ordinary share. The filing also states that Jonathan Klein, the chairperson of Jumia’s supervisory board, has indicated an interest in purchasing an aggregate of up to $1-million in ADSs in this offering at the initial public offering price.
Featured image: Jumia via Facebook