The much-anticipated New York Stock Exchange (NYSE), Initial Public Offer (IPO) by Africa’s e-commerce Company, Jumia, has presented an opportunity for angel investors who intend to exit the company.
The company in an official listing on Friday, April 11, sold 3.5 million American depository shares at a price of $14.50 each, thereby raising $196 million to enhance its expansion and growth plans.
To mark the listing, Juliet Anammah, Jumia Nigeria CEO, accompanied by a15-man Jumia team rang the opening bell of the NYSE Friday, 12th of April 2019.
Although the e-commerce firm says it isn’t yet profitable despite having more than 4 million customers in 14 African countries, sales increased by almost 40% in 2018 to $147.3 million.
Observers are of the opinion that the IPO is a good move for e-commerce in Nigeria and African start-ups in general and that it may pave the way for other African start-ups to get listed.
“This is a good day for Nigeria and a good day for Africans. This is also a good day for African start-ups”, says Collins Onuegbu, director at Lagos Angel Network.
According to him, the IPO represents a type of exit strategy for some of the people who invested earlier in Jumia Nigeria. “Its listing also gives hope that some of our African start-ups can get listed anywhere in the world either in New York, London or even Lagos.
“If you are an angel investor, it is called patient capital. That means it stays a long time before you start getting returns, Jumia needs to raise money to keep expansion and growth, explained Onuegbu while expressing his opinions on the non-profitability of the company.
He added that making a quick buck at this point in the business is not the concern of its investors for now, as they are willing to be part of the growth and await the period till favourable returns come in.
Founded in 2012 as a Rocket Internet-backed startup for Nigerians to buy and sell online, Jumia has come a long way and had a positive impact on the Nigerian and African startup ecosystem.