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Africa’s First Unicorn Jumia Reaches New Milestone While Curbing Losses

By CultureBanx Team

  • Jumia achieved year-over-year growth in 5 countries along with 67% reduction in third-quarter 2023 losses
  • The company’s stock price is up nearly 19% year-to-date with a market cap down to $370M

With its roots firmly planted in the African soil, Jumia Technologies (JMIA +9.44%), the continent’s first technology unicorn, recently achieved a remarkable feat. Jumia improved guidance for its 2023 EBITDA loss, along with announcing the achievement of year-over-year growth in 5 countries. The pan-African e-commerce leader has recorded a robust financial quarter, promising a brighter future for tech startup investment on the continent.

Why This Matters: Jumia’s aggressive growth strategy saw it expand operations into 14 African countries. In addition, it diversified its offerings, venturing into food delivery, flight booking, and even classifieds. By 2018, Jumia had processed over 13 million packages, solidifying its position as a vital player in the African e-commerce landscape.

This rapid scaling and diversification attracted significant investment. Between 2012 and 2016, Jumia raised funds in Series A, B, and C rounds, totaling more than $800 million. This funding came from both local and global investors, including MTN Group, Orange, Goldman Sachs, CDC Group, and AXA Group.

However, Jumia’s journey has not been without challenges. Shares of the company continued to underperform, falling nearly 70% since its IPO. Now the company’s stock price is up nearly 19% year-to-date with a market cap down to $370 million. Though experts still question whether Africa is ready for the “Amazon-style” B2C e-commerce that Jumia operates.

The Lagos-headquartered company now has a presence in 11 countries. Jumia has been the dominant e-commerce player on the continent for more than a decade, though failing to result in profits for the company, but that may be changing.

Jumia is becoming a lean marketing machine with strengthening vendor and supplier relationships. In recent years, Jumia has embarked on aggressive cost-cutting measures to move towards profitability. 

These initiatives include headcount reductions, scaling back product range, and reducing delivery services unrelated to its e-commerce business. These efforts have started to pay off, with the company reporting a 67% reduction in third-quarter losses in 2023 from a year earlier.

Situational Awareness: Jumia’s story is a testament to the potential of tech startups in Africa. Despite the challenges, the company’s journey offers valuable insights for future tech entrepreneurs in the region. As Africa’s first tech unicorn, Jumia has paved the way for future innovators, demonstrating that with the right approach, tech startups can thrive on the continent.

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