After losing $192m (170m euros) in 2018 and facing difficulties in raising additional funds from its current investors, e-commerce giant Jumia is heading to the stock market in order to keep the business afloat.

Jumia is presently putting together an Initial Public Offer (IPO) in New York this year which will reportedly see the business valued at $1.5 billion.

However, reports indicate that some of its current investors are set to divest their stake in the business after it emerged that the MTN Group, Jumia’s biggest shareholder, is looking to raise up to $600 million from the sale of its shares during the IPO.

In addition to mounting losses – Jumia posted a €120.1m loss in 2017 – questions also remain over its Africa-wide strategy after the company cited challenges such as a robbery at its Kenyan warehouse, which saw merchandise worth $560,000 stolen.

In documents filed in New York, Jumia has also declared that it could not guarantee to achieve or to sustain profitability in the future.

Interestingly, Konga, another strong player in the Nigerian e-commerce market, is also set for a major listing on the New York Stock Exchange (NYSE) by the last quarter of 2020.

Although yet to confirmed by the management of Konga who, when contacted, disclosed that it will speak when the time is right, confidential sources within the New York bourse have it that the Konga Group is set for an initial public offering that will see the e-Commerce giant valued at about $3.2b.

Mark Jessey, a prominent stock analyst on NYSE had noted that the proposed Konga IPO is a much sought-after one by investors, many of whom have followed within the last eight months the huge strides and trajectory of the business which came under new ownership after the exit of previous majority investors, Naspers and AB Kinnevik.

“There have been significant investments in critical areas of the Konga Group business portfolio including the omnichannel strategy it pioneered, strong physical presence with a growing chain of retail stores, multiple warehouse facilities, a licensed mobile money/fintech platform and a credible logistics arm with which it has solved the problem of delivery.

“These factors have made Konga the pride of potential investors and there is renewed confidence that Konga can re-write the history of e-Commerce in Nigeria and on the African continent,” he concluded.

SOURCE: https://brandspurng.com/2019/03/14/jumia-loses-192m-heads-to-stock-market-for-survival/

Hmmn.

What a load of rubbish! No private company fighting for its survival heads to the stock market for salvation, as one of the requirements for listing on a stock exchange, especially one as prestigious as the NYSE, is much more intensive scrutiny. America's SEC requires publicly listed companies to file not just annual reports, but quarterly reports giving full details of their balance sheets as well as their cash-flow situation, which are the last things any dying company would be wanting to share with the world.

The reality is that most tech companies that go public do so well before they start making any profits, and that includes not just the likes of Uber and Spotify, which are both still making billion-dollar annual losses, but even Facebook, which was still loss-making at its IPO. These are things experienced investors know and take into account when evaluating startups like Jumia.

I suggest the OP go and find something else to scaremonger about in order to promote his pathetic blog, instead of spreading his ignorance by besmirching one of the few good things coming out of Africa today.

stinking stupid fake post did jumia knock on your door to tell you this nonsense aturu blogger

I want a Google verified Adsense plus website to buy

What

omohayek:
What a load of rubbish! No private company fighting for its survival heads to the stock market for salvation, as one of the requirements for listing on a stock exchange, especially one as prestigious as the NYSE, is much more intensive scrutiny. America's SEC requires publicly listed companies to file not just annual reports, but quarterly reports giving full details of their balance sheets as well as their cash-flow situation, which are the last things any dying company would be wanting to share with the world.

The reality is that most tech companies that go public do so well before they start making any profits, and that includes not just the likes of Uber and Spotify, which are both still making billion-dollar annual losses, but even Facebook, which was still loss-making at its IPO. These are things experienced investors know and take into account when evaluating startups like Jumia.

I suggest the OP go and find something else to scaremonger about in order to promote his pathetic blog, instead of spreading his ignorance by besmirching one of the few good things coming out of Africa today.

My own question is whether Jumia can be profitable in 6 years time?

Do you think it can achieve that critical mass and make a profit? If it does succeed in raising the $1.5b, it will burn through it in 7 years has it expands to other African countries?

grandstar:


My own question is whether Jumia can be profitable in 6 years time?

Do you think it can achieve that critical mass and make a profit? If it does succeed in raising the $1.5b, it will burn through it in 7 years has it expands to other African countries?

I think what needs to be kept in mind is how long it took Amazon to get to a point where it started making profits, let alone the sorts of monopoly profits that have catapulted it to a more than $700 billion capitalisation. The important thing with companies like Jumia and Uber is whether they can grow aggressively enough to earn an overwhelmingly dominant market position, even if they need to lose billions to get to that point; if they succeed in doing so, then they will have more than enough opportunity to recoup their previous expenditures by exploiting their monopoly position. The internet and the rise of machine learning both play to the increasing-returns phenomenon behind this strategy, and that is why investors are willing to overlook tons of red ink far into the future, just as they did with Amazon and Facebook during their own loss-making phases.

Just about the worst thing Jumia could do would be to cater to fear-mongers by abandoning its rapid-growth strategy to prematurely go for profitability. Markets wouldn’t reward such a move but penalise it, as it would imply a much lower net present value for the company’s cash flows. This is what we see at work with Twitter, whose stock suffers with each quarterly earnings report because user numbers continue to shrink, even though the company’s profits are on the rise.