Rocket internet declares intention to sell Jumia

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Africa’s largest e-commerce firm, Jumia is up for sale. Although the details are still scanty on the proposed deal, a Reuters report released late last week also signaled plans to list Jumia in either the Frankfurt or London exchanges late this year. The parent company, Rocket internet are the current owners of the firm which has enjoyed massive success in its 23-country strong African market and with a 28% rise in revenues in the last year alone. However, the E-commerce company has sunk deeper in the red, posting a Sh14.9 billion loss before tax and other costs in the year ended December compared to Sh11.3 billion a year earlier.

Jumia’s sales grew 41.8 percent to Sh62.95 billion on the back of higher customer numbers.

Founded in 2007 by the three Samwer brothers, Rocket is one of the most high-profile companies to have emerged from Berlin’s start-up scene. It has set up and backed dozens of internet commerce sites and marketplaces in the years since, often by copying existing business models from the US and Europe and setting up similar companies in other parts of the world.

Rocket has scored some notable successes, from online retailer Zalando to HelloFresh and Delivery Hero. At the group level, Rocket reported a sharp decline in revenues from €50.4bn in 2016 to €36.8bn last year. The fall reflected the deconsolidation of minority stakes and the sale of businesses previously included in the reporting.

But the owners are seeking a way out from the consumer electronics and fashion retailer, in line with its strategy of selling or listing established internet firms.

A listing of shares, in a volume of under $245.7 million (Ksh 24 billion) is expected to be floated, but no information on Jumia’s valuation was immediately available.

Rocket Internet Chief Executive, Mr. Oliver Samwer, had told Reuters earlier this year that the company needs to hold on to its mountain of cash so it can compete with rivals from the United States and China and pounce when investment opportunities arise.

Jumia said in January that it had 1 billion visits on its pages across Africa in 2017. It has 50,000 merchants in its ecosystem, where 5 million products, hotels, restaurants, and other services are listed.

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Melissa Daniels
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