Jumia - Afrikan Heroes

UPS Partners with Jumia to Expand its Logistics in Africa

April 5, 2022

Africa’s first fintech startup, now e-commerce powerhouse Jumia and American shipping and receiving company UPS have announced a new partnership giving UPS access to Jumia’s ‘last mile logistics’ capabilities and infrastructure in efforts to grow its delivery services in Africa.

Leveraging the Jumia infrastructure in Africa, UPS will offer its customers an extended range of delivery solutions, including door to door package delivery and collection, with a variety of payment options.

“We are delighted and humbled by the opportunity to partner up with UPS, a global logistics leader, to offer them last mile solutions in Africa. We view this as a validation of the strength of our logistics platform as well as an incentive to double down on our efforts to further enhance our services and build a world-class logistics business in Africa,” said Apoorva Kumar, SVP Logistics, Jumia.

Jumia and American shipping and receiving company UPS have announced a new partnership giving UPS access to Jumia’s logistics capabilities and infrastructure in efforts to grow its delivery services in Africa.

This partnership will also allow UPS to leverage the extensive network of Jumia drop-off and pick-up stations to expand the UPS reach and coverage across more towns and cities in Africa.

The collaboration will initially cover Kenya, Morocco, Nigeria, with plans for expansion to Egypt, Ghana and Ivory Coast, and thereafter to the remaining African countries where Jumia operates

“This partnership will help small and medium-sized businesses in Africa that make up 90 per cent of all businesses on the continent and are the backbone of the economy. UPS’s asset-light approach, like the Jumia partnership, offers a pathway for businesses to quickly and reliably connect to new customers around the world through our global network, potentially accelerating their revenue growth,” said Gregory Goba Ble, VP of Engineering and Operations for the Indian subcontinent, the Middle East and Africa, UPS.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Jumia Plans To Invest $590m In Egypt And Rest Of Africa This Year

June 16, 2021

Hesham Safwat, the CEO of Africa-focused e-commerce behemoth Jumia, dubbed “African Amazon,” has said that Jumia had planned to invest more than $590 million in Egypt and other African nations this year.
Safwat didn’t say how much of the money went to Egypt, but he did say it was “one of the top nations we’re concentrating on,”.

He went on to say that the company would put its money towards services. Jumia Mall and Jumia Foods are included.

In July of this year, Jumia Egypt will double the number of pickup stations to 200 and increase the number of last-mile delivery stations by 40%. In addition, to boost next-day delivery services, the company aims to expand its storage and delivery capacity.

Jumia invest Egypt

Jumia Finally Raises $348.6 Million

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write

Jumia Finally Raises $348.6 Million

March 31, 2021

Over a week ago, Jumia Technologies began selling nearly 9 million ADS (America Depositary Shares). The e-commerce group has completed the operation, which is the second of its kind since arriving on Wall Street. All the ADSs put on the market, ie 8,962,961, found buyers. This allowed Jumia to rake in $348.6 million.

Over the period that began its run on March 18, 2021, the company’s average price of an ADS was $ 38.90. This sale shows that Jumia has the confidence of a significant number of investors. This is despite the various hardships it has endured since its introduction and the fact that it is still not profitable.

Proceeds from this “at the market” offering, net of commissions and estimated expenses, are expected to be $ 341.2 million. The operation was led by Citigroup Global Markets.

Jumia intends to use the new funds for general purposes.

An American depositary share (ADS) is a non-US equity share that is owned by a US depositary bank and available for purchase by US investors. Individual shares are known as ADSs, whereas the entire issuance of shares by a foreign corporation is known as an American Depositary Receipt (ADR).

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Jumia raises Jumia raises

Jumia Goes for the Jugular, Raises $400 Million for Expansion

March 23, 2021

Jumia, Africa’s first unicorn and largest e-commerce company is selling 9 million American depositary shares (ADS) in a move to raise more cash for its expansion drive. The e-commerce giant whose stock is currently trading at $42.14 at the New York Stock Exchange expects to raise about $400 million from the exercise. This is coming months after it sold almost 7 million shares at an average price of $30.51 per ADS, raising $243.2 million in the process. It is a smart move from the company as it is cashing in on the Bull Run it has enjoyed in the past eight months.

Critics expressed mixed feelings at the move as Jumia has not made a profit since it launched and although its losses have slowed down, they are still substantial. In 2020, the company lost $177 million, an improvement on the $270 million that it lost in 2019. Observers are of the view that Jumia is bleeding cash and now that it is a publicly listed company, burning cash at that rate could be tricky. Its cash balance for the year ended 2020 was $361 million despite the fact that it raised money in December.

With no clear indication of when the company will become profitable, raising money gives the company runway to survive a few more years without being profitable. Yet, raising money through the secondary sale of shares comes at the cost of diluting shares. The current sales will dilute the current shareholders’ positions by about 10% and Jumia has said the proceeds would be used for general corporate purposes. Yet, shareholders don’t seem impressed with the plan. While shareholders sometimes view secondary offerings as an unusual way to raise money, it is cheaper than debt. Yet, it comes at a cost to the shareholders of lower earnings per share (EPS).

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Investors Betting on Jumia as Shares Soar

January 23, 2021

There are indications that Africa’s first unicorn, Jumia Technologies is having a bullish time as its shares value has been rising trading above 10% after a prominent investor best known for going short said the African e-commerce company’s stock is poised to go higher after a great holiday season. Jumia, a Franco-German company that provides e-commerce sales and services in a number of African countries, has been a battleground stock for the better part of a couple years. Bulls marvel at the potential of Jumia becoming the Amazon of Africa even though one of its top executives maintain that they are Jumia, not Amazon, while bears worry about the logistical and other hurdles it faces trying to get there.

Jumia in 2019 was a target of short seller Citron Research, which called it an “obvious fraud.” With the stock both up 500% in the last 12 months, and still largely unchanged from its early trading daysm,Citron has since had a change of heart concerning the company, reiterating its bullish stance. The investment firm on Wednesday tweeted that the stock is likely to double from here. Citron bets that Jumia, which currently trades at about $44.50 apiece, is “on its way to $100,” according to Citron, which called it the “largest opportunity in e-commerce.”

Citron attached a Jumia graphic highlighting business milestones in 2020, including the site’s record 113 million visits on Black Friday 2020 and a 55% jump in transactions on Jumia’s payment platform compared to Black Friday 2019. The firm said the Black Friday success “validated” Jumia’s opportunity, and should bode well for the company’s future.

Investors should note that Jumia remains an early stage company with a lot to prove and a lofty valuation. This company isn’t yet the slam dunk success story that Amazon is, or that MercadoLibre is becoming in Latin America.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Jumia Shakes Up Wall Street In A $260 million Fundraise

December 5, 2020

After surging a few weeks ago, the value of Jumia’s shares took a serious hit on November 30. Blame it on the announcement of an “at-the-market offering” which implies that current shareholders will see their shares diluted. The e-commerce company turned to Citigroup, an investment banker, to complete its operation.

An ATM offering allows listed companies to raise capital over time. This is done by gradually selling newly issued shares in the secondary market at prevailing market prices, through a designated broker. The Jumia transaction involves 8 million shares. Sold at 33 dollars (the value of the title to date), they will allow the company to raise 260 million dollars. The dilution involved by this will be about 10%.

Jumia intends to use this money for its general development. Africa’s main e-commerce player has made a fairly usual choice given its situation. It will expand its activities to more African countries and invest in improving its capacities in several areas.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Jumia Branches Out Into Logistics Business In 11 African Countries

November 5, 2020

Jumia has announced the opening of its logistics network to third parties. In other words, its logistics business will no longer only be reserved for suppliers operating through its e-commerce platform. Going forward, any business in need of a last mile delivery service can take advantage of Jumia’s network, technology and expertise.

*Apoorva Kumar, Jumia’s senior vice president of logistics services*

“Businesses in all countries are re-examining their costs, especially during Covid-19,” said Apoorva Kumar, Jumia’s senior vice president of logistics services. “For many, logistics are a major cost factor and a headache to manage. We have the infrastructure, people, partnerships and technology to help third parties and partners solve logistics and marketing challenges. We believe that we can provide better quality of service at lower cost.”

Here Is What You Need To Know

The ecommerce company said its new offer has been tested over the past few months with handpicked SMEs and large companies. The results were conclusive enough to push the e-commerce group to offer it in 11 African countries. Jumia’s logistics service is tailored to the continent in a unique way.
It is based on two pillars: Proprietary technology that aggregates demand and optimizes against supply capacity based on parameters such as quality of service, network accessibility and cost of delivery;
A network that includes more than 20 warehouses (over 110,000 m²) and more than 1,300 drop-off and collection stations in 11 countries, including in remote areas. In 2019, Jumia processed more than 20 million packages, thanks to the integration of more than 300 logistics partners of all sizes.

The company’s ecommerce losses have persisted. The company recently stopped its operations in Cameroon, Tanzania and Rwanda. In April 2020, German tech investor Rocket Internet sold its 11% stake in the company. Just last August, it also paid $5 million in settlement of class action lawsuits won by investors in the US who were not satisfied with the company’s IPO documentation.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Analysts sceptical of Citron claims on Alibaba investment in Jumia

November 1, 2020

By David Whitehouse

Claims from Citron Research’s Andrew Left that Alibaba or Softbank are likely future investors in African e-commerce retailer Jumia have left analysts scratching their heads.
“There is no doubt that Jumia will need more capital to fund its expansion,” Left writes in research this week. “Citron believes that Alibaba and/or Softbank will come in as a strategic partner/investor, which will simultaneously validate the business model, put Jumia on the radar of the world’s largest investors and provide a direct channel for Chinese goods into the African market.”

“Jumia is now shipping over 20 million packages a year to cities and rural areas across 11 countries,” according to the latest Citron note. “Nigeria is benefiting from the logistics network, technology and product offerings that Jumia has brought.”
“The only way that this does not work is if this young, tech-hungry population of Nigeria decides that they do not want e-commerce.”
So Jumia stock, according to Citron, is set to advance to $100, from its current level of $17.27. Last year, Left was short-selling Jumia shares and claiming they were worthless. But in early October, he announced he’s buying the stock.
Asian corporate investors take a more stable approach to valuing companies.
“The better timing would have been before Jumia’s IPO if Alibaba ever planned the investment,” says Ming Lu, head of Chinese equities at Aequitas Research in Shanghai. “It’s unlikely that they would do it now or in the future.”

“Softbank seems very unlikely,” says Kirk Boodry, founder of Redex Research in Tokyo. “There is no strategic rationale at all. The company has transitioned almost completely to private equity investment and Jumia as a listed company is probably too late stage for them.”
“Alibaba has demonstrated an interest in expanding globally and there is synergy potential but Africa is one of many regions it could go to,” adds Boodry.
COVID-19
Citron now argues that the COVID-19 pandemic has “quickly shifted the purchasing habits of Africans and accelerated the acceptance of e-commerce”.
But the pandemic has not increased African Internet penetration and has reduced rather than increased the purchasing power of consumers. Jumia co-CEO Sacha Poignonnec was cautious on the second-quarter earnings conference call of 12 August.
The four African countries where lockdowns were implemented represent only about 24% of the company’s market, he said.
Localised lockdowns and partial curfews led to “less drastic changes in consumer lifestyles and behaviour,” said Poignonnec. “In other words, in those countries, we have not seen a surge in demand.”
“My view is that Citron’s report dramatically overstates the market and market potential for Jumia,” says Vicki Bryan, CEO at bond research shop Bond Angle, which publishes on Smartkarma. She questions why Alibaba and Softbank have not already invested in Jumia if they are interested.
“For Alibaba I would expect target regions to be Asia, Latin America and the Middle East before they expanded into Africa,” says Mio Kato, an analyst at LightStream Research in Tokyo. “For Softbank, they generally look for players they think will go global on a grand scale.”

“The idea is plausible but pushing plausible ideas as highly likely is a good way to try and pump a stock,” adds Kato. “I would personally take this with a grain of salt.”
Bottom line
Investors shouldn’t expect Alibaba or Softbank to bail them out of a risky punt on Jumia stock.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

MTN Group sells Shares in Jumia for $142 million

October 31, 2020

Africa’s biggest telecommunications giant, MTN Group has announced the offloading of its stake in Jumia, one of Africa’s largest eCommerce firms making a net proceeds of $142.31 million dollars from the sale. This move is part of MTN’s ongoing efforts to streamline its portfolio and minimise debt by disposing of its non-core businesses. Recall that in August 2020, a week before the Jumia’s Q2 2020 earnings call, MTN announced that it was planning to sell off its 18.9% stake in Jumia and telecom tower company, IHS towers.

Then, MTN said that it had not finalised the decision. But it now reveals that it made a filing with the New York Stock Exchange to prepare for a secondary sale of its shares. “We are proud to have been a partner in the evolution of one of Africa’s pioneering online marketplace businesses and will continue our relationship with Jumia through ongoing operational partnerships in some markets,” MTN said in a statement.

In April 2019, Jumia became the first African tech company to list on the New York Stock Exchange, and its shares soared to hit a $2 billion valuation. Yet, its failure to make a profit, a short-selling article from Citron, and issues with partners all sent its stock crashing down.

Six months later, Jumia had lost its unicorn status and its shares sold for as low as $3 at the start of the pandemic.

In March 2020, Rocket Internet sold off its entire stake in Jumia but did not fully reveal the financial details behind the deal. Interestingly, Jumia’s stock rose 142% in the months following the pandemic and it briefly regained its unicorn status.

But MTN’s announcement in August caused fresh uncertainty for investors. When Jumia finally released its financial results, its shares fell once more to single-digit numbers.

Andrew Left, writer of the short-selling article that initially sent Jumia’s shares tumbling down, seemingly had a change of heart. His article earlier in October 2020 began to attract investors once more.

In the last 7 days, Jumia’s shares have steadied between $16 – $19 and its market cap has reached as high as $1.5 billion. A negative pre-market movement has followed MTN’s announcement, but it has remained within the price range of the last seven days –$17.25 and it’s currently valued at $1.35 billion. MTN initially had a 40% stake in Jumia, but over the years, the stake gradually dropped to 31.28%, and then 18.9% by the end of 2019. All things considered, we estimate the value of MTN’s sale to be between $250 million – $255 million.

Jumia is expected to announce its earnings for Q3 2020 on November 10, 2020, and hopes will be high for anyone with the slightest interest in the online retail space in Africa.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Things Are Looking Up for Jumia Again Inspite Losses

March 1, 2020

Jumia Co-CEOs, Jeremy Hodara and Sacha Poignonnec

Jumia closed a very stormy year on a positive even as losses continue to soar. The major eCommerce platform which exited three African markets last year as it adjusts to the reality of the eCommerce ecosystem in the continent said it will continue to focus on markets that present the best long term growth potential. This led the eCommerce giant to close its business in Rwanda, Tanzania and Cameroon in 2019 while focusesing ans strengthening operations in Nigeria, Egypt, Morocco, Ivory Coast, Ghana and Kenya.

In its financial results for the year 2019 which was released by the company few days ago, Jumia said that it now has 6.1 million active consumers as of December 2019 which is a 54% increase compared to 4 million in December 2018. Orders recorded by the company hit 8.3 million in Q4 2019, up 49% from Q4 2018. For the full year 2019, orders increased by 85% to 26.5 million in 2019, compared to 14.4 million in 2018. In Q4 2019, the company’s gross merchandise volume (GMV) decreased by 3.3% to €301 million from €311 million in 2018. However, for full-year 2019, GMV amounted to €1.1 billion, a 33% increase from €828.2 million in 2018.

It is important to point out that Jumia reports GMV, annual active consumers, and orders on a gross basis, regardless of cancellations, failed deliveries and post transaction returns. Also, for the year 2019, announced a gross profit of €24.8 million in Q4 2019, a 64% increase from 15.2 million in 2018, and 75.9 million for the full year 2019, 72% higher than the 44.2 million reported in 2018. The increased gross profit earnings do not seem to be wholly caused by the reported number of active users and orders as the company attributes this to the increased monetisation of its platform, enhanced promotional discipline and reduced emphasis on consumer incentives.

According to the company, despite a 38% increase in fulfillment expense in Q4 2019, the company’s gross profit after fulfillment expense was positive at €1.0 million compared to a loss of €2.1 million for the same period in 2018. However, despite improved margins in gross profits, Jumia records an operating loss of €61.1 million in Q4 2019, a 15% increase from €52.9 million in Q4 2018. Consequently, operating loss for the full year 2019 reaches €227.9 million, 34% higher than €169.7 million in 2018.

Jumia attributes this loss to an increase in general and administrative expense, as well as fulfilment expense: both frequently cited causes by the eCommerce company. Jumia, recorded higher losses in 2019 than it did in 2018. But the impressive numbers reported by Jumia for JumiaPay led us to speculate that the payment platform could be its saving grace.

Jumia Co-CEOs, Jeremy Hodara and Sacha Poignonnec have recently made a case for the success of JumiaPay, citing the successes of Aliexpress’ Alipay and Ebay’s Paypal as evidence that a payment platform can be successfully built off a company with a solid structure.

According to Jumia’s earnings report, about 2.4 million transactions were recorded for JumiaPay, more than the total number recorded in the whole of 2018. For the full year 2019, JumiaPay’s transactions increased by 278% from 2.0 million transactions in 2018 to 7.6 million transactions in 2019.

In terms of value, Jumia reports a 57% increase from €29.1 million in Q4 2018 to 45.6 million in Q4 2019, taking the total value of JumiaPay transactions for the full year 2019 to €124.3 million, up 127% compared to 2018. Jumia also reports that on-platform penetration of JumiaPay as a percentage of GMV reached 15.2% in the fourth quarter of 2019 compared to 9.4% over the same period in 2018.

Jumia claims that the increased adoption of JumiaPay is a result of its continuous education of consumers, as well as a number of marketing initiatives. But it is important to note that cancellations, as well as returns, are factored in this figure. However, Jumia’s general numbers are in keeping with the widespread adoption of e-payment channels as reported by the Nigeria Inter-Bank Settlement System (NIBSS).

The jury is still out on the possibility of having a truly profitable eCommerce platform in the mold of Jumia and its close competitor, Konga. But given the relative popularity of financial platforms in Africa, a payment channel such as JumiaPay could change the narrative.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry