Jumia Technologies, an African e-commerce Unicorn known as Alibaba Africa, was listed on the New York Stock Exchange on Friday at an opening price of $18.95, an increase of more than 30% over the IPO offering price and a market value of $1.5 billion. Closing up 75.6% to a new high of $25.46, the analysis said it would boost the overall confidence of African e-commerce industry.
African e-commerce giant Jumia Technologies, known as Alibaba Africa or Amazon Africa, was listed on the New York Stock Exchange on Friday, April 12, trading code JMIA, offering a price of $14.50 and 13.5 million ADS shares. It plans to raise $196 million and become the first African technology start-up company listed on a major global exchange.
One hour after the opening of the U.S. stock market, Jumia also started trading smoothly, opening at $18.95, up more than 30% from the IPO price, with a market capitalization of $1.5 billion. In the day, Jumia recorded a maximum of $25.46 since its listing, 75.6% higher than the IPO offering price, and a minimum of $18.26 in the day, 25.9% higher than the IPO offering price. Eventually, Jumia closed up 75.6%, the highest ever at $25.46, down more than 1% after the day.
Jumia was scheduled to go public on Thursday, but was temporarily postponed for another day until April 11, the media said. The company said it would take a day to digest the data for the first quarter of 2019. After Thursdays U.S. stock market, Uber, the worlds largest travel giant and the largest market share in the U.S. online contract car market, officially submitted its listing documents. Jumia may also take advantage of the market sentiment east wind driven by Uber.
Wall Street found that Jumias IPO was priced conservatively, with $14.50 per share in the middle of the guidance range of $13-16. Two weeks ago, Lyft, the first U.S. -listed company, raised its offering price range during the roadshow and set the upper limit of the latest range. As a result, Lyft fell into the bear market on the second day of the IPO, and its share price is still about 20% lower than the offering price.
A month before March 13, Jumia formally submitted an application for an IPO in the United States. Later, it was reported that MasterCards European department had pre-bought $50 million in shares. Goldman Sachs, AXA and MTN have participated in the first round of financing. The startup, which was founded in Lagos, Nigerias largest city in 2012, became Africas first unicorn (i.e., a private listing valued at more than $1 billion) in 2016.
The company has a number of online vertical operating platforms, providing services in 14 African countries, including online takeout service Jumia Food, travel booking service Jumia Flights and advertising classification website Jumia Deals, as well as e-commerce logistics infrastructure service Jumia Services consisting of payment system Jumia Pay and delivery service.
The Wall Street Journalism columnist, Tongfang Research (ID: tongfangsec), has written an article detailing Jumias company status and African e-commerce opportunities. See Understanding Jumia IPO: An African version of Alibaba Comes!
According to CEOSacha Poignonnec, in addition to its own products, Jumia also allows third-party businesses in Africa to sell on the platform. At present, more than 80,000 active sellers are using the platforms payment, logistics and data analysis services, so it is also known as Africa Amazon. The most popular products are smartphones, washing machines, fashion accessories, womens hair care products, 32-inch color TV sets and so on.
But its prospectus shows that Jumia has not made a profit since its inception in 2012. In 2018, EBITDA lost 172 million euros and its annual revenue was 139 million euros. Of course, like most of the growing start-ups, Jumias revenue is growing rapidly, rising 11% to 93.8 million euros in 2017 and 39% year-on-year in 2018, handling more than 13 million packages last year.
The analysis points out that Jumia has built many B2C online retail infrastructure services, bringing higher costs. In the future, we should focus on the growth of logistics expenditure and revenue of non-commodity delivery business. At present, freight and shipping account for more than half of the logistics costs. If the company can improve customer access and reduce logistics expenditure, such as increasing the revenue of Internet services, it is expected to achieve profits as soon as possible.
TechCrunch, a cutting-edge technology media, points out that Jumias listing is a significant milestone for the company, as well as a combination of global e-commerce and Africas online retail potential.
Consulting giant McKinsey expects the digital consumer market in Africa to reach $2 billion by 2025. But competition will become more intense, and international giants such as Alibaba, Amazon and DHL Express will pour into this emerging market to provide more services and buy up in large quantities. At present, Alibaba has not fully entered the African market, while Amazon has begun to provide AWS cloud services in Africa.
According to the above report, the success of Jumias listing will also affect African competitors. At present, many business decisions and venture capital activities in the local e-commerce sector have been suspended, and they want to see how Jumias IPO is performing, according to an African electronics executive. Jumias success on the first day of the IPO is likely to restore investorsconfidence in the entire African e-commerce industry. Perhaps this year, many of the upcoming unicorns are praying secretly not to overpriced and ambitious to avoid the tragedy of Lyfts post-listing crash. * This article is from Wall Street (Wechat ID: Wallstreetcn). Source: Editor-in-Charge of Wall Street: Wang Fengzhi_NT2541
According to the above report, the success of Jumias listing will also affect African competitors. At present, many business decisions and venture capital activities in the local e-commerce sector have been suspended, and they want to see how Jumias IPO is performing, according to an African electronics executive. Jumias success on the first day of the IPO is likely to restore investorsconfidence in the entire African e-commerce industry.
Perhaps this year, many of the upcoming unicorns are praying secretly not to overpriced and ambitious to avoid the tragedy of Lyfts post-listing crash.
* This article is from Wall Street (Wechat ID: Wallstreetcn).