Jumia made its first post-IPO earnings call and withstood a short sale attack in May, with Wall Street showing confidence in the pan-African e-commerce company.
In the figures, the key takeaways were that Jumia’s Gross Merchandise Value (GMV), the total amount of goods sold during the period, grew 58 percent to 240 million euros. Market revenue increased 102 percent to € 16 million, and GMV’s gross profit as a percentage grew 6.5 percent in the first quarter of 2019.
Overall, Jumia’s operating losses during the period widened to € 45.4 million from € 34.3 and negative EBITDA increased to € 39.5 million from € 30.2.
Therefore, the startup is still losing money (see large losses reported in the IPO filing), but it is improving its ability to win.
CEO Sacha Poignonnec also shared a longer-term revenue strategy in Jumia’s first quarter earnings call. The startup plans to convert the capabilities of JumiaPay and Jumia Logistics into independent services throughout Africa.
Founded in Lagos in 2012, the company currently operates multiple online verticals in 14 African countries, from B2C consumer retailers to travel reservations.
For Jumia, going public has been a checkered affair. After becoming the first technology company operating in Africa to be listed on a major stock exchange (the NYSE in April), the company saw its stake increase by 70 percent after listing on the NYSE in April to $ 14.50.
Then in May, Jumia’s stock collapsed when it was attacked by a street vendor, Andrew Left, who accused the company of fraud. On the earnings call, the startup CEO responded to hawker complaints saying, “Jumia stands behind our prospectus and audited financial statements… and will not be distracted by those looking to… make a profit at our expense.” Poignonnec later went to the media and refuted the claims as “market rumors rather than facts.”
Citibank analyst Andrew Howell posted his own response, much of it discrediting citrus research.
Overall, Wall Street appeared to be confident in Jumia’s results and scope after the IPO, with Raymond James and Berenberg upgrading their recommendations for Jumia shares to equivalent buy ratings. Jumia shares have been stable since then, closing at $ 25.81 on Monday.
When it comes to e-commerce in Africa, Jumia may face tougher competition from DHL. The shipping giant teamed up with MallforAfrica to expand its Africa eShop app to 20 countries in May.
DHL went live with the digital retail app in April, bringing more than 200 US and US sellers, from Neiman Marcus to Carters, online to African consumers.
Africa eShop operates using MallforAfrica.com’s white label fulfillment service, Link Commerce.
There is a competitive e-commerce scenario between the two platforms. DHL Africa eShop is promoted as “Africa’s largest online shopping platform”. Jumia said: “We believe that our platform is the largest e-commerce market in Africa,” in his SEC F-1 filing.
DHL’s partner for the new app, MallforAfrica, brings expertise in collaborating with several big-name retailers, including Macy’s and Best Buy. MFA’s payment and delivery system serves as a digital intermediary and logistics manager for reputable retailers to sell products in Africa.
As for global e-commerce names, Alibaba has talked about expanding Africa, but has not fully gone into it at the moment.
Amazon offers limited e-commerce sales on the continent, but most notably, it has started offering AWS services in Africa.
With Jumia’s commitment to offering its logistics and payments-as-services capabilities, DHL and MallforAfrica could be in a position to compete with Jumia. All three could also find themselves competing (or working with) big e-commerce names entering Africa.
For the time being, DHL’s expansion into Africa eShop creates an additional option on overlapping product categories with Jumia, while also offering African consumers greater price competition in the operating countries it shares with Jumia. They are currently at 10: South Africa, Kenya, Nigeria, Tanzania, Cameroon, Uganda, Ivory Coast, Rwanda, Senegal and Ghana.
In the last year, there has been a huge market movement in the space for motorcycle travel in Africa. Uber began offering a two-wheeled transportation option in East Africa in 2018, around the same time that Bolt (formerly Taxify) started motorcycle taxi service in Kenya.
SafeBoda, the Uganda-based motorcycle travel company, moved to Kenya in 2018 and last month raised a Series B round of an undisclosed amount on plans to further expand into East Africa and Nigeria.
In Lagos, there is already the Gokada company, which made a round of $ 5.3 million in May.
Gokada has trained and shipped over 1,000 motorcycles and their riders on its app that connects city passengers to DOT-approved taxis and helmets.
The startup has completed nearly 1 million trips since it was founded in 2018 by Fahim Saleh, a businessman from Bangladesh. Gokada will use the financing to increase its fleet and travel volume, while developing a network to offer goods and services to its drivers, Saleh told TechCrunch in this exclusive.
Gokada differs from other ride and hail companies in that it does not split revenue from fares with drivers. Gokada charges drivers a flat fee of 3,000 Nigerian Naira per day (about $ 8) to work on its platform. The company seeks to generate a greater proportion of its revenue by building a business network around its community of drivers.
More American sports celebrities are getting involved in African tech. Serena Williams invested in Andela, NBA star Andre Iguodala joined Jumia’s board, and in May, Hall of Famer Joe Montana invested in Chipt Cash, a financial technology company. African.
The Africa-focused cross-border payments startup generated a $ 2.4 million seed round led by Deciens Capital.
The payments company also convinced 500 Startups and Liquid 2 Ventures, co-founded by Joe Montana, to join the round.
Chipper Cash Uganda CEO Ham Serunjogi introduced the American soccer legend directly.
Based in San Francisco, with offices in Ghana and Nairobi, Chipper Cash has processed 250,000 cross-border P2P transactions for more than 70,000 active users, according to Serunjogi.
Along with the seed round, Chipper Cash is launching Chipper Checkout – a merchant-focused C2B mobile payments product.
This side of the startup’s offerings is not free, and Chipper Cash will use the proceeds from Chipper Checkout to support its mobile money business in Africa at no charge.
Chipper Cash will expand beyond its current operations in Ghana, Kenya, Rwanda, Tanzania and Uganda in the next 12 months.
Finally, in May, Facebook week removed a network of hundreds of Instagram pages, groups and accounts labeled as producing “coordinated inauthentic behavior” toward Africa.
The activity originated in Israel and was directed mainly to Nigeria, Senegal, Togo, Angola, Niger and Tunisia.
Most were political in nature and paid primarily by Archemedes Group, a global political consulting firm, Facebook said.
The matter highlighted a pattern of fake news on social media platforms rising in Africa. Cambridge Analytica, backed by American big data billionaire Robert Mercer, was found to have participated in elections in Kenya and Nigeria prior to her controversial role in directing pro-Brexit and pro-Trump online activity in 2016. Facebook subsequently banned Facebook. Cambridge Analytica from your platform.
Fake news driven by social media, mainly on Facebook and WhatsApp, became a problem in the 2017 elections in Kenya, the country’s parliament passed a bill in 2018, with specific punitive measures, to combat it.
Facebook has prioritized growth in Africa and has increased users from Africa to more than 200 million, and Facebook’s proprietary chat tool WhatsApp is the most downloaded messaging app on the continent.
But the recent purge of Africa’s Facebook account shows when Facebook travels, so does its list of pros and cons, including the ability for global players to use it for nefarious uses in local settings.
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