Pan-African e-commerce company Jumia has raised US$196 million after an initial public offering (IPO) on the New York Stock Exchange (NYSE) that has been hailed as a landmark for the African tech space.
Jumia filed S1 documents with the US Securities and Exchange Commission (SEC) last month to launch its IPO, which was underwritten by banks such as Morgan Stanley and Citigroup.
The stock went on sale on Friday 12 April 2019, initially valued at US$14.50 per share, but traded at US$25.46 to value the company at more than US$1.9-billion.
This was the first time an African "unicorn"- a company valued at more than US$1-billion - had listed on an international exchange, and secured Jumia US$196-million.
The company, which is headquartered in Berlin and was initially funded by Rocket Internet, has pan-African telecoms giant MTN as its biggest shareholder, and secured further investment from the likes of Mastercard and Pernod Ricard in advance of the offering.
Founded in Nigeria in 2012 by Sacha Poignonnec and Jeremy Hodara, Jumia now has operations in 14 African markets are over four million customers.
In spite of its IPO success, however, Jumia is still not profitable. Its most recent financial results, released last April, saw its adjusted losses more than double to EUR39.4 million.
This was in spite of an increase in sales, with Jumia putting the losses down to continued investment in building its product ahead of the IPO. In the last 18 months Jumia has launched its own payment platform JumiaPay and consumer-facing payment mobile application Jumia One.
Though much African and international media has heralded the IPO as a major landmark for the African tech space, others are more sceptical, noting the fact that Jumia is a European-headquartered company with European founders.
iROKO chief executive officer Jason Njoku was among those taking to Twitter to argue the irrelevance of the raise in the context of the wider African tech space.
"Jumia IPO is great for Rocket Internet. For the founders of Nigeria tech it means nothing. That's my opinion," he posted on Twitter.
Andela vice president of global operations Seni Sulyman, however, detailed the positives of the IPO for African tech.
"Regardless of the controversy about whether Jumia is an African company or profitable, one of the positive outcomes of their IPO is that many Africans might just now dare to build companies that one day list on global stock exchanges. That can't be such a bad outcome," he tweeted.