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Jumia to list in the US
Posted on Wednesday, 13 March 2019 10:21
Jumia has unveiled plans to hold an initial public offering (IPO) in the US almost a year to the day after Reuters reported Rocket Internet started exploring the option for the loss-making African e-commerce shopping platform.
Paperwork submitted by the Germany-incorporated marketplace unicorn to the securities regulator shows Morgan Stanley, Citigroup, Berenberg and RBC Capital Markets, among others, are underwriters on the listing.
The float currently has a USD 100.00 million placeholder and comprises the sale of American depository shares on the New York Stock Exchange.
As the main reasons for the listing include increasing financial flexibility and Jumia’s public profile, as well as providing access to the equity market for future fundraising, the group has not allocated proceeds for any particular purposes.
The pan-African e-commerce company’s activities comprises a marketplace connecting businesses with consumers; a logistics arm carrying out the shipping and delivery of packages; and a payment service facilitating transactions among participants active on the platform.
It primarily generates revenue from commissions - where third-party vendors pay fees based on the goods and services they offer - and from the sale of items where it acts directly as supplier.
Revenue, however, is not sufficient to cover operating expenses and, as such, Jumia has incurred losses since being founded in 2012, including EUR 170.40 million (USD 195.20 million) in the 12 months to 31st December 2018.
The company is active in six regions in Africa, which consist of 14 countries that together accounted for 72.0 per cent of Africa’s gross domestic product and 74.0 per cent of consumer expenditure in 2018.
Its marketplace comprised of 81,000 active sellers as of 31st December 2018, up from 53,000 at the end of December 2017.
Jumia also had 4.00 million active consumers and gross merchandise value of EUR 828.20 million at the end of 2018, compared to 2.70 million and EUR 507.10 million, respectively, by 31st December 2017.
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