Jumia Wins IFC, Axian Backing in $50 Million Equity Fundraising (Bloomberg)

Jumia Technologies AG secured $50 million in fresh equity funding from its biggest shareholder and the World Bank’s International Finance Corp. as the African e-commerce company pushes toward its first profit.

The IFC led the capital injection with about $25 million, while top shareholder Axian Telecom, and others also took part in the funding round, Chief Executive Officer Francis Dufay said in an interview, without providing more detail.

“We stuck to a limited amount in the raise, although we had more demand,” said Dufay. “The money will enable us to de-risk our plans by strengthening the balance sheet and it enables us to tactically invest in getting more supply” and logistics, he said.

Founded 15 years ago, Jumia set out to build the continent’s equivalent of Amazon, operating online marketplaces from Nigeria and Egypt to Kenya and Ivory Coast. Africa has one of the world’s youngest and fastest-growing populations. Smartphone adoption continues to rise, while hundreds of millions of consumers remain underserved by traditional retail infrastructure, making it a compelling but challenging place to set up an e-commerce business.

Jumia has had to build out its own logistics, distribution and payments networks, solving for issues that operators in Europe, China or the US rarely face. The challenges have left investors of the New York-listed company skeptical, with the shares going from a high of more than $60 a share in 2021 to $6 now, valuing the company at $743 million.

Under Dufay, the company has concentrated resources on markets where it sees the strongest path to profitability such as Nigeria.

Jumia now operates in eight markets, and has shifted its focus away from chasing growth at any cost and toward building a leaner, more disciplined operation. It has consolidated warehouses, scrutinized spending and become more selective on expansion.

The ongoing conflict in the Middle East has raised fuel prices and stoked inflation in Jumia’s markets, although its supply from China and Turkey remained resilient.

Despite this, the firm is expected to report a profit in its current period, Dufay said.

“We are going to profitability in the fourth quarter for the first time ever,” he said.

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