Jumia Sells Out: African E-commerce Giant Cashes In on Desperation
It’s been just two weeks since we broke the news that Jumia, the struggling African e-commerce company, was about to raise a whopping $100 million in secondary shares to prop up its stagnant user growth. And today, the company’s desperation has officially been priced.
Jumia has unloaded 20.2 million American Depositary Shares (ADSs) onto the market, averaging a paltry $4.92 per share. This sale of 20,227,736 ADSs raked in a measly $99.6 million, a far cry from the estimated $100 million the company was hoping for.
But don’t worry, the folks at Jumia are claiming this is just a great opportunity to "accelerate growth" and "further strengthen their balance sheet." Baloney! This is nothing more than a Hail Mary pass from a company that’s quickly running out of cash.
As of the last quarter, Jumia’s cash reserves stood at a paltry $92.8 million, down from $120.6 million in Q4 2023. And their customer base? A meager 2 million active quarterly customers, a laughable number considering the vast 600 million people they’re supposedly serving.
But hey, at least CEO Francis Dufay is optimistic, right? "Our customer base is still relatively small… we can do much more on the customer base." Yeah, sure thing, Francis. That’s why you’re begging for money on the stock market.
Let’s not forget that this is the same company that raised a whopping $600 million between 2020 and 2021 when the markets were favorable. Now, when the going gets tough, they’re forced to sell shares at a loss. Talk about a losing strategy.
So, here’s to Jumia: a company that’s clearly struggling to find its footing in the e-commerce space. Can they bounce back? Only time will tell, but for now, this sale reeks of desperation.
