African e-commerce firm Jumia sold its secondary shares for $99.6 million.

African e-commerce firm Jumia sold its secondary shares for $99.6 million.

In the news, if you missed it.

In a secondary share offering, Jumia, the prominent African e-commerce platform, generated $99.6 million from the sale of 20 million ordinary shares.

The average selling price was approximately $4.95 per share, which is slightly higher than the trading price of $4.90 recorded last Friday.

Among the notable investors, Pernod Ricard, a leading global spirits and wine company, acquired 1.27 million shares for about $6 million. 

A Wall Street analyst has projected that Jumia could face a loss of $65 million in 2024, while the company’s cash reserves were reported at $92.8 million in the second quarter.

The funds raised from this offering are anticipated to significantly enhance Jumia’s liquidity.

Although the company has not yet provided comments regarding the share sale, it intends to allocate the proceeds towards improving customer acquisition, expanding its supplier network, and upgrading its distribution infrastructure.

Additionally, investments will be made in technology that supports vendor services and marketing, which have been operational since 2021.

Despite falling short of revenue expectations in the second quarter of 2024, investor confidence in Jumia’s potential within the African e-commerce sector remains robust, which is crucial for its continued growth.

CEO Francis Dufay emphasized that this capital will “further strengthen our balance sheet and help us accelerate our growth trajectory as we progress along our path to profitability.”

Source: Tapiwa Matthew Mutisi / Innovation Village