🚚 Jumia's New Fundraising Plan
African e-commerce giant Jumia is selling 20M American depositary shares, aiming to raise $100M. This follows a significant stock rally but also a drop to $4.90 per share. CEO Francis Dufay says the funds will expand logistics and enhance technology.
📈 Challenges and Market Reaction
Despite raising almost $600M in 2020-2021, Jumia’s stock drop reflects shareholder concerns over dilution and market volatility. Dufay highlights improved cost management and efficiency, stressing the need for further growth and investment to scale faster.
💰 Cash Position and Revenue Decline
Jumia’s liquidity has decreased to $92.8M from $120.6M in Q4 2023. The funds will boost customer acquisition and vendor expansion. Despite a 7% order increase, GMV and revenue fell by 5% and 17%, respectively, due to currency devaluation in Egypt and Nigeria.
📊 Profitability and Market Strategy
Jumia's adjusted EBITDA loss narrowed by 10%, driven by cost-saving efforts. The focus now is on loss before income tax due to currency volatility. Dufay compared this approach to Mercado Libre’s strategy, emphasizing a holistic view in markets with fluctuating currencies.
Will Jumia's fundraising efforts be enough to spur growth?
