On Friday, Africa focused e-commerce platform Jumia listed on the New York Stock Exchange. The e-commerce firm, founded by French entrepreneurs, Jeremy Hodara and Sacha Poingnonnec, started operating in Nigeria in 2012. It currently has 4 million customers spread out in 14 countries including Egypt, Ghana, Kenya, Senegal, Angola, and Algeria.
At the time of listing, Jumia priced its share at $14.50 (KSh1,465) each. By the end of the first day of trading, the share price was up 75 % to close at above $25 (KSh2,525) indicating investors’ optimism in the platform.
Erik Hersman, Chief Executive at a software company based in Kenya praised the listing at the NYSE. He told the BBC, “It’s an important event in the evolution of the African tech scene.” The company aims to raise $ 196 million (KSh19.8 billion) through the public offering. It will use the money to expand its business and for marketing.
Since establishment, Jumia has never made a profit. Instead, It has accumulated losses worth approximately KSh100 billion.
Jumia faces numerous hurdles in its business such as poor infrastructure, political instability, government interference, and terrorist threats. As per the online publication, MarketWatch, the ecommerce company was robbed roughly KSh57 million worth of merchandise in one of its warehouse in Kenya.
The firm declared that it will not pay dividends in the near term as it plans to grow its operations in the continent. “We intend to retain all available funds and any future earnings to fund the development and expansion of our business,” read the statement.