E-Commerce In Africa: Owners Consider Selling Jumia in 2018

There are plans underground to sell Africa’s leading e-commerce firm, Jumia, to a new investor, Reuters is reporting.

The owners of the firm, Rocket Internet, a German start-up investor, are also considering listing Jumia either in Frankfurt or London.

This is expected to take place this or next year, but according to Reuters, Rocket Internet is expected to “shortly mandate banks for an initial public offering of Jumia.”

Rocket Internet helped set up Jumia in 2012, but the company has been operating with losses for years despite conquering the market space.

But the owners (Rocket Internet) are seeking a way out from the consumer electronics and fashion retailer (Jumia), “in line with its strategy of selling or listing established internet firms”.

Quoting sources, Reuters said Berenberg, which has a track record of working with Rocket on capital market transactions, is seen to be in a good position to win a mandate, the people said.

A listing of shares, in a volume of under €200 million ($245.7 million) is expected to be floated, but no information on Jumia’s valuation was immediately available.

Rocket Internet declined to comment.

Last year, Rocket Internet floated online food groups, Delivery Hero and HelloFresh, while the investor is currently also preparing a flotation of its online furniture retailer Home24.

Rocket Internet Chief Executive, Mr Oliver Samwer, had told Reuters earlier this year that the company needs to hold on to its mountain of cash so it can compete with rivals from the United States and China and pounce when investment opportunities arise.

Jumia has ecommerce operations in 14 countries throughout Africa, a continent with 1.2 billion consumers and 15 million small and medium-sized companies. It also features services such as an online hotel booking and a food delivery platform.

Jumia said in January that it had 1 billion visits on its pages across Africa in 2017. It has 50,000 merchants in its ecosystem, where 5 million products, hotels, restaurants and other services are listed.

According to a presentation from Rocket Internet, Jumia saw its adjusted loss before interest, tax, depreciation and amortization widen to €80.7 million in the first nine months of 2017. Revenues edged up to €57.3 million.

This article was originally published on httpss://www.businesspost.ng

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