20 March 2019

Nigeria: Jumia's Billion-Dollar NYSE Listing Comes Amid Both Good and Worrying Signs

analysis

Later in 2019, the New York Stock Exchange will see the first listing of an African technology company to be valued at more than $1-billion, a real, actual dinkum unicorn. The company, Jumia, is Nigeria-based and is known as the African Amazon since it is primarily an e-commerce business. But is it a good investment?

African techies and "Africa Rising" enthusiasts are willing the NYSE listing of African "unicorn" Jumia to succeed, and hopes are high the listing will go off well. But if you read the company's pre-listing statement, it does illustrate just how amazingly difficult e-commerce in Africa actually is.

Jumia operates in 14 African countries, had four million customers and sales of about $149-million in 2018. This is a chunky rise from the $94-million in sales and 2.7 million customers it had 2017.

On the other hand, in a way typical of booming internet startups, the more customers it gets, the bigger it losses become; slipping from €165.4-million in 2017 to €195.2-million in 2018.

Yet, the company is hoping to raise around $1.5bn on the listing, which is backed by everyone you can name, including Morgan Stanley, Citigroup, Berenberg and RBC Capital Markets. Goldman Sachs would normally...

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