Grace Ashiru
Ten days after announcing its intention to sell 20 million ordinary shares in a secondary offering, Jumia ($JMIA) has successfully completed the sale, achieving its funding goal. According to a securities filing reviewed by TechCabal, the sale generated gross proceeds of $99.6 million. This equates to an average share price of approximately $4.95, slightly higher than the $4.90 trading price observed on Friday. Earlier reports from TechCabal on Monday indicated that Pernod Ricard, a leading liquor and wine producer, had acquired 1.27 million ordinary shares, amounting to an investment of around $6 million.
A Wall Street analyst projects that Jumia may incur a loss of $65 million for the entire year of 2024. As of Q2 2024, the company’s cash reserves were reported at $92.8 million. The infusion of $99 million from this share sale is expected to notably strengthen Jumia’s financial position.
Jumia has yet to provide any official comments on the transaction.
The e-commerce giant plans to allocate the new funding toward its ongoing initiatives to attract more customers, grow its supplier network, and enhance its logistics infrastructure. Additionally, the company will channel resources into upgrading the technology that underpins its vendor support systems and marketing services—a specialized offering it has been providing since 2021.
Even though Jumia fell short of its revenue goals in the second quarter of 2024, investor confidence in its potential to dominate Africa’s e-commerce landscape remains strong. The company will need to leverage all this optimism to achieve its ambitious goals.
