Jumia receives new funding to expand its business.
It was recently announced that Jumia received funding of a whopping $326 million from Goldman sachs (a leading global investment banking, securities and investment management firm) AXA (a French multinational insurance firm headquartered in the 8th arrondissement of Paris that engages in global insurance, investment management, and other financial services.) and MTN (a South Africa-based multinational mobile telecommunications company, operating in many African, European and Asian countries).
Before we go further, let us have a brief background look at Jumia and its operations in Africa; Nigeria especially. So then, who is Jumia? And what is their business? Jumia is a Nigerian online shopping site for a wide range of electronics fashion, home appliances and kid’s items. Often referred to as the Amazon of Nigeria, and as at 2015, they have branches in ten other countries. These countries are: Egypt, Morocco, Kenya, Ivory Coast, Uganda, Ghana, Cameroon, Tanzania, Senegal and Algeria.
Jumia was founded in 2012 by a team that included Jeremy Hodara, Sacha Poignonnec, Tunde Kehinde, Raphael Afaedor, and Leonard Stiegeler, with funding from Rocket Internet In partnership with Millicom, a Swedish telecoms company. The partnership between Rocket internet and Millicom formed the African Internet Group (AIG). AIG presently has 10 e-ventures including Jumia with over 71 different companies across 26 african countries.
The e-ventures include Jumia, Zando,an online fashion store; Hellofood, an online food delivery service; Kaymu, an auction and shopping service; Jovago, an hotel booking portal; Carmudi, a car classifieds marketplace in Africa; Everjobs, a fast growing job portal in emerging markets; Vendito, a general classified platform; eazy taxi, a taxi booking service and Lamudi, a real estate classified market place in Africa. However, in the month of 2013, MTN acquired a 33% stake in the parent company of the ecommerce giant (AIG). This therefore made AIG an associate of MTN.
Just some hours ago, it was revealed that AIG, the parent company of Jumia has secured $326 million in funding from a group of investors including Goldman Sachs, AXA and MTN. The new capital investment will boost the value of AIG to nearly $1.1billion. Apart from this new inflow of capital, Jumia received over $200 million in investment from 2012-2014. Jumia is valued at $555 billion and has an estimated turnover of $600 annually.
Jumia in February 2016 partnered with AXA to provide insurance products and services to African customers. AXA’s African insurance companies plan to propose custom-made insurance products to Jumia and AIG’s e-commerce client base through its ecosystem of marketplaces and classifieds services. Jumia says that AXA will become its exclusive provider of insurance products and services through Jumia and other AIG online and mobile platform in Nigeria. With Jumia receiving keen support from AXA which seeks to become a shareholder of AIG alongside MTN, Rocket Internet and Millicon, and also support from MTN and the newly initiated investor, Goldman Sachs, there is little doubt that Jumia about the future prospect and profitability of Jumia.
With the strategic partnership of MTN, a leading mobile carrier with its broad African presence; AXA, a leader in the provision of insurance products and services; and Rocket Internet’s extensive background in online business models, Jumia is a pole position to expand, innovate and connect businesses to the fast growing consumer demand. They could as well cement their place as the Amazon of Africa with all the latest fundings.
“Internet is creating unparalleled opportunities for consumers and businesses in Africa to connect and do business in a new way. We continue to be very excited about the growth prospects of Jumia and this new partnership will enable us to capture them,” said Sacha Poignonnec and Jeremy Hodara, founders and co-CEOs of Jumia and AIG. “We expect Africa’s e-commerce and online businesses to develop rapidly as a result of the strong growth of the middle class coupled with the increasing mobile phone and internet penetration. Jumia’s biggest competitor is konga. They both claim to be the largest ecommerce platform in Nigeria and Africa, and they both provide a platform for local African businesses to do business with the fast growing African consumers and middle class.
Rocket Internet CEO, Oliver Samwer said in a statement: “From the very first investment in Jumia, we have been consistently impressed by both the high-quality management team and growth trajectory, We believe that Jumia is a proven winner and that it will continue to be the leading e-commerce platform in Africa.
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