Jumia’s listing great exit plan for MTN, Rocket Internet

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Rocket Internet and MTN’s Jumia has finally listed on the New York Stock Exchange (NYSE:JMIA), in a bid to seek more investors to expand its reach across Africa.

Dubbed Africa’s Amazon, Jumia Technologies AG listed 17.6 percent of its shares on the NYSE at $14.50 per share of its 13,500,000 ADSs to raise upwards of $197m on its first day of trading.

Mastercard Europe SA also agreed to purchase €50.0 million of its ordinary shares in a concurrent private placement at a price per share equal to the euro equivalent of the initial public offering price per ordinary share.

Firms that stand to gain out this Berlin-based firm include German start-up incubator Rocket Internet and its biggest shareholder MTN Group and more recent investors such as Pernod Ricard and Mastercard.

Though Jumia’s share price started at $14.50, it had soared by 75% on their first day of trading to $25.46 valuing the company at more than $1.9bn.

Founded in 2012, Jumia is currently active in 14 African countries with more than 81,000 active sellers transacting online with millions of consumers. The e-commerce platform directly employs more than 5,000 team members in Africa.

“This achievement has been made possible thanks to the hard work of our teams, the trust of our consumers, as well as the commitment of our sellers and partners. All stakeholders deserve credit for this milestone, and we are just at the beginning of a long and great journey. We are going to continue to focus on our mission and to work even harder to help consumers, sellers, partners and all stakeholders benefit from this technological revolution.”said Sacha Poignonnec and Jeremy Hodara, co-founders and co-chief executives. 

According to reports, after the New York listing, MTN is set to IPO its Nigeria unit in Lagos to clear part of a $1 billion regulatory fine in 2016. Rocket Internet owned 21.74 percent of Jumia as of the end of December while MTN Group held 31.28 percent. The entry of Pernod Ricard and Mastercard might have diluted Millicom International, AXA Africa Holding and Goldman Sachs but they too stand to gain after this IPO.

Founded in 2012, Jumia has been bleeding money. Its revenues stood at 130.6 million euros in 2018 compared to 94 million euros in 2017 but the firm’s losses rose from 165.4 million euros in 2017 to 170.4 million euros in 2018. The firm had accumulated losses of 862 million euros by the end of last year. The IPO is the only sensible way out for MTN and Rocket Internet and other shareholders. For Rocket Internet, Jumia was its most expensive venture and an IPO is the only likely way for the firm to exit quickly and safely.