Nigerian E-commerce Startup Jumia Files for IPO on NYSE

Pan-African e-commerce company Jumia filed for an IPO on the New York Stock Exchange today, per SEC documents and confirmation from CEO Sacha Poignonnec to TechCrunch.

The valuation, share price and timeline for public stock sales will be determined over the coming weeks for the Nigeria-headquartered company.

With a smooth filing process, Jumia will become the first African tech startup to list on a major global exchange.

Poignonnec would not pinpoint a date for the actual IPO, but noted the minimum SEC timeline for beginning sales activities (such as road shows) is 15 days after submitting first documents. Lead adviser on the listing is Morgan Stanley.

There have been numerous press reports on an anticipated Jumia IPO, but none of them confirmed by Jumia execs or an actual SEC, S-1 filing until today.

Jumia’s move to go public comes as several notable consumer digital sales startups have faltered in Nigeria — Africa’s most populous nation, largest economy and unofficial bellwether for e-commerce startup development on the continent. Konga.com, an early Jumia competitor in the race to wire African online retail, was sold in a distressed acquisition in 2018.

With the imminent IPO capital, Jumia will double down on its current strategy and regional focus.

“You’ll see in the prospectus that last year Jumia had 4 million consumers in countries that cover the vast majority of Africa. We’re really focused on growing our existing business, leadership position, number of sellers and consumer adoption in those markets,” Poignonnec said.

The pending IPO creates another milestone for Jumia. The venture became the first African startup unicorn in 2016, achieving a $1 billion valuation after a $326 funding round that included Goldman Sachs, AXA and MTN.

Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries, spanning Ghana, Kenya, Ivory Coast, Morocco and Egypt. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.

Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape.

Jumia has also opened itself up to traders and SMEs by allowing local merchants to harness Jumia to sell online. “There are over 81,000 active sellers on our platform. There’s a dedicated sellers page where they can sign-up and have access to our payment and delivery network, data, and analytic services,” Jumia Nigeria CEO Juliet Anammah told TechCrunch.

The most popular goods on Jumia’s shopping mall site include smartphones (priced in the $80 to $100 range), washing machines, fashion items, women’s hair care products and 32-inch TVs, according to Anammah.

E-commerce ventures, particularly in Nigeria, have captured the attention of VC investors looking to tap into Africa’s growing consumer markets. McKinsey & Company projects consumer spending on the continent to reach $2.1 trillion by 2025, with African e-commerce accounting for up to 10 percent of retail sales.

Jumia has not yet turned a profit, but a snapshot of the company’s performance from shareholder Rocket Internet’s latest annual report shows an improving revenue profile. The company generated €93.8 million in revenues in 2017, up 11 percent from 2016, though its losses widened (with a negative EBITDA of €120 million). Rocket Internet is set to release full 2018 results (with updated Jumia figures) April 4, 2019.

Jumia’s move to list on the NYSE comes during an up and down period for B2C digital commerce in Nigeria. The distressed acquisition of Konga.com, backed by roughly $100 million in VC, created losses for investors, such as South African media, internet and investment company Naspers.

In late 2018, Nigerian online sales platform DealDey shut down. And TechCrunch reported this week that consumer-focused venture Gloo.ng has dropped B2C e-commerce altogether to pivot to e-procurement. The CEO cited better unit economics from B2B sales.

As demonstrated in other global startup markets, consumer-focused online retail can be a game of capital attrition to outpace competitors and reach critical mass before turning a profit. With its unicorn status and pending windfall from an NYSE listing, Jumia could be better positioned than any venture to win on e-commerce at scale in Africa.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], Maarten van den Heuvel [2].

African Development Bank Starts Electricity Cooperative Feasibility Studies in Nigeria and Ethiopia

The African Development Bank has kicked off a feasibility study to explore the potential of electricity cooperative business models in Nigeria and Ethiopia.

The effort is part of the Bank’s goal of achieving universal electricity access across Africa by 2025. Currently, power shortages diminish the region’s GDP growth by 2-4% per year, holding back job creation and poverty reduction efforts.

The study, funded by the South-South Cooperation Trust Fund, will be conducted by the National Rural Electric Cooperative Association (NRECA) International over three months. NRECA will consider regulatory, legal, technical and socio-economic factors that impact the creation of electric cooperatives in the two nations.

Electricity cooperatives are tax-exempt businesses set up and owned by the consumers who benefit from the services provided in generation, transmission and/or distribution.

They are used in many parts of the world to provide last mile connections to rural areas through grid extensions and cooperative enterprises. Where successful, they also improve rural electrification, while creating sustainable businesses.

Speaking at the kick-off meeting, Batchi Baldeh, the Bank’s Director of Power Systems Development, thanked the South-South Cooperation Trust Fund for financing the initiative. “This study is timely and aligned with the Bank’s New Deal for Energy in Africa. We look forward to working with NRECA International to execute the study, and to leverage its extensive experience in electricity cooperative business models to pave the way for the implementation of transformational projects across Africa” he said.

Underscoring the importance of Government cooperation and commitment, he added that the cooperatives rely on strong partnerships among governments, rural/local communities and development partners for implementation and success.

“We selected Nigeria and Ethiopia following dialogue with their respective ministers of energy during the Bank’s Africa Energy Market Place held in July 2018, where they expressed their governments’ commitment to improve rural access through established models. We rely on this cooperation to explore this innovative model of delivering our High 5 to light up and power Africa”, said Baldeh

Findings of the study will be delivered in May this year. They will inform the viability of plans to pilot the model in the selected countries.

For more information about the African Development Bank Group, click here.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: VOA [1], [2].

The ‘Angel’ Who Secretly Pays Patients’ Hospital Bills

In Nigeria, very few medical services are free of charge, and if you can’t pay your hospital bill you may not be allowed to leave. Who will help? In this deeply religious society, many stranded patients hope for divine intervention.

Zeal Akaraiwai does not have the wings of an angel – he has a sleek black Mercedes, all purring engine and deep leather seats. This 40-something financial consultant – trim and neat – steps out of his car in a potholed government hospital car park in Lagos. He is greeted warmly by a team of social workers, and gets straight to business. He asks them for “the list”.

Neatly printed on A4 paper are the names of patients who are well enough to go home. But they are not going anywhere, because they cannot pay their medical bills.

Zeal has met people who have been forced to stay on the ward for six – or even eight – weeks after they have been discharged. Some Nigerian hospitals set up instalment plans, but even the first instalment might be too onerous for those earning a pittance, or nothing at all.

Heading along crumbling walkways to the wards, Zeal listens intently to the social workers’ running commentary about those he is going to meet. In a male ward the tiles underfoot are scuffed, the paint peels, and 20 beds line the walls. Ancient fans whirr overhead, and the nurses wear epaulettes on the shoulders of starched white uniforms. An orderly is sweeping up with a dustpan and brush. Everybody is doing their best in challenging circumstances.

The social workers guide Zeal to the bedside of a patient with a heavily bandaged thigh. He bends down close, and speaks in a low voice: “What happened to you?” The young man, a barber, says he was shot by he-doesn’t-know-who.

“So how’re you going to settle your hospital bill?” asks Zeal. “I’m praying to God,” the man replies.

Zeal chats to him for a while – the man does not ask who Zeal is, and Zeal does not tell him. Then, out of earshot of the patient, Zeal checks the man’s story with the nursing staff. The bill is $250. And the barber is in luck – Zeal will pay it. Later today, the patient will go home.

Zeal does not keep in touch with any of the people he helps. He does not even want to be thanked. But there is one thing he would like in return – that one day they might tell a story about him: the story of how when they were in hospital, an angel came, paid their bill and left.

“That’s why I call this the Angel Project,” he says. “Be the angel you hope to meet.”

Paying the fees of hospital patients who are not able to settle their bills is one of the ways that Zeal realises his Christian faith. He says he wants to show people that everyone can do something to help someone else. Zeal’s friends and family also give him money for the project, and he keeps receipts in a neat black book, together with details of the patients whose bills he’s paid.

In the women’s ward, Zeal is taken to see a patient in her 60s who is unconscious and on oxygen. She has had a serious stroke. The social workers want Zeal to pay the bill she has run up so far, so she can be moved to an intensive care unit for specialist treatment. He shakes his head, and moves away from her bedside.

Outside in the corridor, the woman’s daughter joins him. She is young – and resigned. Zeal quizzes her about the health of her mother. It seems that even if the bill is paid here, it will be just the first step on a very long haul – if indeed the patient survives. Zeal speaks kindly to the young woman, and says he is sorry. She thanks him, smiles, turns, and goes back to watch over her mum.

Paying for this woman’s treatment would mean breaking Zeal’s own, self-imposed, rules – he does not generally help anyone with a serious, on-going condition. The Angel Project pays for those who are well enough to go home immediately.

“Of course, sometimes I digress,” he says.

He remembers Montserrat – a woman who bled for 11 months because she needed a hysterectomy. Zeal paid $400 for her operation. And on today’s visit to this public hospital, there is a good deal more digression.

The Angel Project picks up the tab for a patient who needs a leg ulcer operation, and Zeal wants to know about the progress of a 10-year-old who is awaiting further intestinal surgery. He has paid for her treatment so far, and will continue to do so until she returns home. The social worker says the child is doing very well.

Zeal has met this little girl, but he does not want to see her again. “She has my son’s eyes,” he remembers.

Today, Zeal visits everyone on the social workers’ list. He heads out to the cashier to settle the bills of eight patients. His hospital philanthropy always makes him feel sad, and he is angered by the failure of government.

“The mere fact an individual, like me, has to go into a hospital to pay the bills of people who are stranded speaks volumes about the injustice in the system,” he says. “There’s no reason why we cannot have proper health insurance. We have clever people who can think of schemes that can work.”

In Nigeria only 5% of the population is covered by health insurance. There is scepticism about how a universal scheme might operate, given the huge disparities of wealth, and the millions of poor people whose contributions would have to be covered by the state. But Zeal is impatient.

“Every week I see the impact of not having compulsory health insurance, and people die. So where do you want to put the price of a human life?”

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: Linda Pressly via BBC  [1], [2]. Image sources: Grace Ekpu [1], [2].

Nigerian Ministry of Interior eCitBiz Record Migration Begins

The Nigerian Ministry of Interior recently announced a directive which seeks to move certain aspect of its services online. This is in a bid to deepen the e-governance initiative of the current administration. In furtherance of this directive, the Ministry of Interior is set to begin the migration of Business permit/Expatriate Quota and place of worship records to the eCitBiz online portal.

The Ministry of Interior by this notice has directed all affected companies and places of worship licenses by the Ministry to update and migrate into the new online portal.

Goals of the Migration

  • To provide online update for various Citizenship and Business Department
    Services.
  • To provide online payment platform for companies, places of worship, Marriage
    and Citizenship Processing of Applications.
  • To provide a centralized and interactive database for all services of the
    Citizenship and Business Department.

Timeframe

  • The update/migration process is set to run from 23 July 2018 to 31
    August 2018.
  • The time set to commence full automation of the online platform is 3 September 2018.

For more information about the process, contact the Nigerian Ministry of Interior here.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: Famsville Solicitors  [1]. Image sources: [1].

Nigeria Immigration Service Suspends Extra $110 Visa Fees

Recently, a new policy affecting foreigners entering the country with a Visa on Arrival was introduced at Lagos Murtala Muhammed International Airport. The new policy imposed an additional $90 on foreigners on arrival as Biometric Visa-On-Arrival charge and an additional $20 as processing fees. This newly imposed fee was regardless of the Visa Fees these foreigners must have paid in their respective countries before coming into Nigeria.

As expected there was a bit of chaos at the Murtala Muhammed International Airport (MMIA), Lagos, on Monday when the policy was being implemented as the new immigration policy caught many foreigners arriving the country unawares. Some foreigners were forced to pay with their credit cards or contact their sponsor company in Nigeria to bear the cost. Some others were totally stranded as they weren’t granted access to the Immigration Counters till they paid the fees. It is quite surprising that even countries that had a reciprocity agreement with Nigeria exempting them from paying Visa Fees such as Mauritius, Dominica, Haiti, Fiji Island were equally not exempted from the payment of the fees.

It was gathered that concession of some of the services initially handled by the Immigration Service had been granted to private firms. The biometric visa-on arrival charges was being handled by Online Integrated Service (OIS) while the processing charge is being handled by New Works. This might have been the reason why the new policy lacked proper publicity. It was also gathered that the idea of imposing the biometric charges was borne out of reciprocity as some countries like the United Kingdom, United States of America, South Africa, Kenya and China were already imposing biometric charges on the citizens of Nigeria who travel into their countries.

In the light of the discontentment expressed by the foreigners and their representatives in Nigeria and a need for a wider publicity of the policy, the policy has been suspended. There may be a possibility that the policy will be resumed when it has been appropriately publicized but as it is now, foreigners can enter the country without paying additional visa fees in-country since they would have paid the necessary fees in their respective countries.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, and Remuneration needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: Famsville Solicitors via Lexology [1]. Image sources: [1].