By April 13, 2019

JUMIA Raises USD 196 Mn IPO Round

By April 13, 2019

After some weeks of waiting, Africa’s Amazon has finally sealed the deal with an IPO round to the tune of USD 200 Mn for its listing on the New York Stock Exchange. The Nigeria-founded firm now trades under the JMIA symbol, selling its USD 13.5 Mn American Depository Shares at USD 14.50 each.

Looking At Other E-commerce IPOs

JUMIA is definitely not the first e-commerce company on the planet to file for an IPO, as its global counterparts such as Alibaba, eBay and Amazon have long been in the NYSE game. In September 2014, Alibaba was reported to have sold additional company shares to make the listing of the China-born e-commerce firm the biggest in history. The deal, according to CNBC, was valued at USD 25 Bn,  which at the time beat the USD 22.1 Bn IPO by Agricultural Bank of China in 2010. Alibaba’s USD 68 per share IPO initially raised 21.8 Bn. The company alongside its shareholders sold 320.1 million American Depositary Shares in the offering.

Amazon went public in 1997, under the stock symbol AMZN. At the onset, the American e-commerce company was set for a USD 12 to USD 14 range, but later found itself in USD 14 to USD 16 before the firm’s investment bankers settled on the USD 18 price. Amazon’s Initial Public Offering raised it USD 54 Mn, giving the company a market value of USD 438 Mn at the time. Coming out with 3 million shares, the Bezos-led company’s stock soared and hit USD 30 on the first day of trading, and closed at USD 23.

With its IPO, online auctioneer eBay raised USD 63 Mn, a process by which it floated out 3.5 million shares. Due to the company’s 39.7 million outstanding shares at the time, alongside its share price at the close of the day, its market cap hit around USD 1.9 Bn. This listing was done on January 2, 2002, on the same day of which the online marketplace sped out the starting gate by almost tripling its share price to end a month-long IPO dry spell.

JUMIA’s Rings A Loud Bell

Based on the IPO history of three of world’s largest e-commerce platforms, the Rocket Internet-backed African giant has done quite well, especially with a round that only bows to a known few, prominent of which is Japan’s eBay-like first tech startup unicorn Mercari’s listing in Tokyo’s Stock Exchange’s Mothers Market – raising as much as USD 1.1 Bn. Africa’s tech unicorn, which was founded by Frenchmen Jeremy Hodara and Sacha Poignonnec raised the USD 196 Mn in a round spearheaded by Morgan Stanley, Royal Bank of Canada, Citigroup and Berenberg Capital Markets.  

The e-commerce startup is the first African company to have achieved such feat, further cementing its place as the continent’s tech unicorn. Per a statement that followed the listing, JUMIA revealed that all its employees across Africa “Rang the bell at the same time as the Wall Street ceremony in New York took place.” The giant explained that the historic moment would not have been possible if not for the teams’ hard work, trust from its consumers and the relentlessness of its salespeople as well as partners.

According to Quartz Africa, Jumia obtained the fancy of investors and basked in a remarkable return on its first day, closing it’s stock up at 75 percent. This development came at a time when Amazon is yet to fully fulfill its African expansion promise. As for Amazon, it offers e-commerce sales in the continent already and has started offering AWS services in Africa. This listing also comes in the wake of DHL’s entry into the African scene, partnering with MallforAfrica’s Link Commerce fulfillment service to launch its Africa eShop platform with 200 global retailers on board. Meanwhile, McKinsey has said that the competition to capture Africa’s digitizing consumer markets could spend about USD 2 Bn online by 2025.

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