MTN Does A Rocket Internet By Selling Off Its 18.9% Stake In Jumia

Some six months after Rocket Internet divested its 11 percent stake in Jumia and exited the beleaguered e-commerce business, MTN Group appears to have followed suit.

South Africa’s MTN Group, which is the largest telco in Africa, has long been the largest shareholder in African e-tailer, Jumia, holding an 18.9 percent stake. But according to reports, the telco has now exited its 18.9 percent stake, raking in around USD 142.31 Mn in net proceeds.

In August, MTN made it known that it had filed with the New York Stock Exchange (NYSE) to prepare for a secondary sale of Jumia shares as part of a ZAR 25 Bn. This was in connection with a plan aimed at simplifying its portfolio over the next three to five years.

“The group has now fully exited its 18.9 percent investment in Jumia,” MTN said in a statement.

“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,” it continued.

In December 2013, MTN, together with Millicom and Rocket Internet, became a 33.3 percent stakeholder in Africa’s e-commerce and digital services company Jumia Group (formerly Africa Internet Group (AIG). MTN eventually invested an additional USD 143 Mn in Jumia Group, upping its stake to 41.4 percent.

But given the struggles of Jumia, MTN has been looking to exit the e-commerce business which has proven a tough nut to crack on the African continent. And it appears MTN has now achieved those intentions with the recent announcement.

In the same vein, word got out in April that Rocket Internet, the German tech investment firm behind Jumia had sold its stake in the troubled African e-commerce business.

It is understood that Rocket Internet held an 11 percent stake in Jumia as of November 8 last year and the firm sold its stake in Jumia between then and the onset of the COVID-19 crisis.

After listing on the New York Stock Exchange (NYSE) last year, Jumia shares soared remarkably but the progress was cut short when a report put out by short-seller Andrew Left’s Citron Research alleged fudged numbers in its sales figures.

That sent Jumia shares crashing and things haven’t quite gotten really better since then. Some months later, Jumia did reveal that members of its J-Force sales team in Nigeria had indeed tampered with the numbers, though the company maintained that it wasn’t significant.

Since last April, quarterly results have reflected mounting losses and Jumia has since moved to downsize its e-commerce business, exiting some African countries and scaling down in others. However, in the last few quarters, there has been some semblance of recovery.

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