NAIROBI, Kenya- Jumia has successfully completed a secondary offering of 20 million ordinary shares, raising $99.6 million in gross proceeds.
This funding boost comes just ten days after the company announced its intention to sell, signaling strong investor confidence despite recent financial hurdles.
The share sale saw Jumia secure an average price of approximately $4.95 per share.
Among the notable investors was Pernod Ricard, a global leader in the wine and spirits industry, which purchased 1.27 million shares, contributing around $6 million to the total proceeds.
This injection of capital couldn’t come at a better time for Jumia, which reported cash reserves of $92.8 million as of Q2 2024.
The additional $99.6 million is expected to significantly bolster the company’s financial standing as it navigates a challenging market landscape.
So, what will Jumia do with this fresh influx of cash? The e-commerce giant plans to channel the funds into several key areas to drive growth and innovation.
First on the list is expanding its customer base and supplier network, crucial components for scaling its operations across Africa.
In tandem, Jumia is set to enhance its logistics infrastructure—a vital move in a continent where delivery networks can be as challenging as the sales themselves.
Moreover, Jumia aims to upgrade the technology that supports its vendor systems and marketing services.
Since launching these specialized offerings in 2021, the company has seen them become a core part of its value proposition to sellers across the continent.
By investing in these areas, Jumia hopes to sharpen its competitive edge and better serve its growing community of vendors and consumers.
Despite falling short of revenue expectations in Q2 2024, Jumia continues to capture the imagination of investors who see long-term potential in its strategy.
However, the road ahead is not without its bumps. A Wall Street analyst has projected a loss of $65 million for Jumia in 2024. Yet, this latest round of funding gives the company some much-needed breathing room to push forward with its ambitious plans.
As Jumia looks to the future, the onus is now on the company to leverage this financial boost to not only meet but exceed market expectations.
With Africa’s e-commerce sector still in its early stages of development, the potential for growth is immense—if Jumia can effectively navigate the complexities of the market.
