The Konga-Jumia Merger That Never Happened & Sim Shagaya’s Verdict
New details have emerged on the unsuccessful Konga-Jumia merger attempted in the early days between two companies considered among e-commerce pioneers in Nigeria and the African continent at large.
Sim Shagaya, a notable Nigerian entrepreneur, has shed light on the missed opportunity for a potential consolidation between Konga and Jumia in their infancy, opening up on this in a recent interview with TechPoint Africa. The discussion unfolded against the backdrop of Shagaya’s extensive entrepreneurial journey, marked by both triumphs and setbacks.
Shagaya, the founder of Konga, recounted the early days of the e-commerce venture and its rapid growth trajectory. However, amid the success, a pivotal moment arose when Rocket Internet, the parent company of Jumia, approached Konga for a merger.
Despite initial discussions circa 2012, the merger never materialised. Shagaya reflected on the encounter with Rocket Internet’s leadership, noting a mismatch in personalities and objectives. “We almost merged with Jumia at the very beginning,” he recounts.
The tech CEO described a meeting with Rocket Internet’s leadership that didn’t end on the right note due to a perceived disconnect in values between himself and Rocket Internet boss Oliver Samwer.
“I thought we had a pretty good conversation except for the fact that he [Samwer] struck me as quite arrogant. I remember at the end, he wouldn’t shake my hand and I think if we had actually shook hands and if he had been more humble, we would have merged.”
The divergence in paths between Konga and Jumia became evident over time, with both companies navigating their unique challenges and opportunities. While Jumia went on to achieve a significant milestone with its listing on the New York Stock Exchange but continues to encounter turbulence in its quest for profitability, Konga grappled with financial struggles amid Nigeria’s economic downturn and was offloaded by investors in a firesale.
“I’ll be honest. I didn’t want to do it. It was very painful, very tragic,” says Shagaya, referring to Konga’s eventual sale to tech conglomerate Zinox in 2018.
Shagaya reflects on Konga’s early strategy, acknowledging a focus on heavy spending to grow market share as it competed with Jumia. He admits to a mistaken belief that acquiring customers at all costs was the only way, but now sees the value in a slower, more sustainable approach prioritising gross margins and customer experience.
“I look back now and I think I could have built this very differently. I think it’s entirely possible to build in the short term, a smaller, slower-growing business that has its eye on gross margins and provides a great customer experience,” the ex-Konga boss says.
Despite investor backing at the time, Shagaya now emphasises profitability over rapid expansion in his current edtech ventures, uLesson and Miva, both of which have been reported to be on an impressive run.
Following his departure from Konga in 2016, Shagaya has taken on a fresh challenge in the education sector which he hopes to pursue for the foreseeable future. “I think the best thing I can do right now is to… hunker down on uLesson,” he says.
Additionally, Shagaya recently launched The Honey Badger Fund, aiming to support aspiring African entrepreneurs, stating “I really want to help a select few entrepreneurs just do really well over the next, 10, 20 years.”
Reflecting on his experiences, Shagaya emphasised the importance of strategic decision-making and team dynamics in entrepreneurial pursuits.
He noted, “You can identify an opportunity that you need to build but if you don’t have the right people in the room, you’re not going to get it done.” Shagaya’s views emphasise the necessity of assessing market viability and assembling the right talent for sustainable business growth.
Featured Image Credits: CNN
