Africa’s Amazon ready to make market debut on New York Stock Exchange
The largest e-commerce operator in Africa, Jumia, is expected to raise over $200 million at its initial public offering (IPO) this week. The IPO will become the first for e-commerce and tech businesses from Africa.
Jumia, which will trade as “JMIA” on the New York Stock Exchange, has set a share price range of $13 to $16 and is offering 13.5 million American depository shares for purchase.
The company, which was founded seven years ago, operates across 14 African countries including Nigeria, Kenya, Morocco, and Egypt. Jumia describes itself as “the only e-commerce business successfully operating across multiple regions in Africa.” The retailer’s customer numbers jumped 48 percent last year to about 4 million, thanks to surging smartphone use in Africa.
Jumia is often tagged as an African Amazon and is widely expected to become the continent’s first tech unicorn (a venture-funded company valued at more than $1 billion). The company’s revenue rose by almost 40 percent last year to $147.3 million.
“If an online retailer develops a name and offers a good consumer experience, people feel safer to use it,” said Seema Shah, a consumer analyst at Bloomberg Intelligence in New York.
According to Shah, for the IPO to be successful, investors will have to see Jumia as “a chance to play in Africa with less risk.”
Jumia said competition and “more aggressive pricing policies” from rivals including South Africa’s Takealot and Egypt’s Souq.com could negatively impact its business. It claims the listing is meant to give the company financial flexibility and increase awareness of the brand among investors.
“There are other online shopping services, but Jumia is definitely No.1,” Christophe Fofana, a taxi driver and student in Ivory Coast told Bloomberg.
“In Ivory Coast, we’re sometimes skeptical about online businesses. Jumia is fast, reliable and all you need to register is a phone number and an email address,” he said.
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