es has been a brilliant stock market debut for Africa's first tech startup in New York. The stock price of online trader Jumia rose more than 75 percent on the first trading day on Friday. The company had chosen the New York Stock Exchange to attract IT investors for whom Africa has been a blank spot on the map. With a market value of $ 1.94 billion, Jumia is also the first unicorn from Africa to name more than $ 1 billion worth of start-up companies.
At the start of the stock exchange, employees from 14 African countries traveled to New York. The head of Jumia Nigeria, Juliet Anammah, rang the famous bell for the opening of the trade. "All these people have made it possible and are extremely proud," said Sacha Poignonnec, one of the two chief executives, in a telephone conversation with F.A.Z. It was a milestone for Jumia, whose name translated from an African dialect "fly away" meant.
"Very healthy business model"
The business idea had Poignonnec and his colleague Jeremy Hodara, while they were still working for the strategy consultancy McKinsey. "At that time, online commerce was already established in China, Europe and the United States, but there was no big player in Africa," said Poignonnec. When the now 38-year-old consultant met the German internet entrepreneur Oliver Samwer, they also had inspired him with the idea. Samwers venture capitalist Rocket Internet was building online retailers in Asia and South America at the time, and was also providing seed capital for Jumia.
Seven years ago, Jumia initially launched in four countries, Morocco, Egypt, South Africa and Nigeria. Today, the company is active in 14 African countries. Rocket Internet continues to be involved, with a 30 per cent stake in the South African MTN group, the largest mobile communications operator in Africa. Recently also Mastercard and the French beverage company Pernod Ricard rose. Jumia advertises "100 percent Africa, 100 percent Internet".
But the company has its legal seat in Berlin, the founders and CEOs are French. This has led to a lively discussion in the social media about whether Jumia is indeed an African company. Confusion also emerged when other founders and co-founders of the "Amazon of Africa" appeared in the media, from African countries. According to a spokesperson, they were involved in setting up the business in individual countries or certain functions, such as the Fataumata Bâ won the Aenne Burda Prize. However, the Pan-African company has only two founders, Hodara and Poignonnec. "Many people want to be founders of Jumia," said the latter.
The proceeds from the IPO will now be used to expand the operating business in Africa. "We have a very healthy business model that we continue to implement." Poignonnec did not want to know when to make a profit. Last year, the loss amounted to 170 million euros with a turnover of 130 million euros.
Comparable with Europe 20 years ago
Corporate takeovers or mergers are currently not thought. Instead of focusing on growth at any price, they focus on creating "value for consumers". Jumia is not the only online retailer in Africa. In South Africa, there is strong competition from the local market leader Takealot of the media group Naspers. In Kenya, the mobile phone company Safaricom launched the Masoko trading platform in 2017. Even Alibaba from China has ambitious plans.
The African market offers enormous potential for online trading, summed up the founder of Jumia. The continent was similar to Europe or the United States 20 years ago, when people there still hesitated to enter their credit card number online. "Our mission is to bring together so many sellers and buyers in Africa efficiently and get used to shopping on the Internet." Jumia had offered 13.5 million shares in New York at $ 14.50 a share of $ 196 million. At the price of $ 18.95 the stock went into trading, at the close of trading it cost $ 25.46.