Jumia, an African e-commerce platform backed by MTN and Rocket Internet, filed on Tuesday March 12 with the US Securities and Exchange Commission (US SEC) to raise up to $100 million in an initial public offering (IPO). Morgan Stanley, Citi, Berenberg Bank and RBC Capital Markets are the joint bookrunners on the deal. No pricing terms were disclosed.
“The deal size is likely a placeholder for an IPO that we estimate could raise $500 million,” according to Renaissance Capital.
The Berlin, Germany-based company was founded in 2012 and booked $147 million in sales for the 12 months ended December 31, 2018. It plans to list on the NYSE under the symbol JMIA. Jumia filed confidentially on November 19, 2018.
Recall that last year, Jumia’s losses widened to $195.2 million on revenue of just $149.6 million. The company, which operates in 14 African countries including Nigeria, Kenya, Morocco and Egypt, is also burning through cash with negative operating cash flows of $159.2 million.
The intended IPO, analysts said is a landmark first for e-commerce and tech businesses on the continent. It could also mark a possible exit by Rocket Internet, Jumia’s German parent company, divesting its remaining 28percent stake in the company.
As part of its pitch to shareholders, Jumia cites itself as “the only e-commerce business successfully operating across multiple regions in Africa” with four million active customers of December last year.
That status is the result of a reshuffling as several of Rocket Internet’s African online businesses across food delivery, real estate, hotel and flight bookings were reorganized under the Jumia brand in 2016—the same year it reached a billion-dollar valuation after an $83 million investment from insurance company AXA for an 8percent stake. It also notes its add-on services including Jumia Logistics, its product delivery arm, and Jumia Pay, its payments solution, as added assets.
But its SEC filing documents also show the company’s pan-African model has so far seen hundreds of millions of dollars in losses mounting each year by far exceeding revenue the company has been able to generate. As of Dec. 31 2018, the filings show the company has accumulated losses of nearly $1 billion.
Iheanyi Nwachukwu
