Africa Roundup: Jumia’s IPO, DHL launches Africa e-Shop, Cathay’s $168M VC fund, ConnectMed acquiredMay 2, 2019
The biggest news in a month of weighty African headlines was Jumia listing on the New York Stock Exchange.
After filing SEC IPO docs in March, the Pan-African e-commerce company’s shares began trading on the NYSE April 12, opening at $14.50 under ticker symbol JMIA. Jumia stock rose north of 70 percent on its first day of trading and started this week at $46.
With the public listing, Jumia became the first startup from Africa to list on a major global exchange. The IPO raised over $200 million for the internet venture.
The listing created another milestone for Jumia. In 2016 the company became the first African startup unicorn, achieving a $1 billion valuation after a funding round that included Goldman Sachs and MTN.
Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries—from consumer retail to travel bookings.
Jumia has also opened itself up to Africa’s traders with more than 80,000 active sellers on the platform.
Like Amazon, Jumia brings its own mix of supporters and critics. On the critical side, there are questions of whether it’s actually an African startup. The parent for Jumia Group is incorporated in Germany and current CEOs Jeremy Hodara and Sacha Poignonnec are French.
On the flipside, original Jumia co-founders (Tunde Kehinde and Raphael Afaedor) are Nigerian. The company is headquartered in Africa (Lagos) and incorporated in each country in which it operates (under ECART Internet Services in Nigeria). Jumia pays taxes on the continent, employs 5,128 people in Africa (page 125 of K-1) and the CEO of its largest country operation Juliet Anammah is Nigerian.
The Jumia authenticity and diversity debates will no doubt continue. But the biggest question — the driver behind the VC, the IPO, and demand for Jumia’s shares — is whether the startup can produce profits. The company has generated years of losses, including negative EBITDA of €172 million in 2018 compared to revenues of €139 that same year.
DHL Africa e-Shop
Call it coincidence or competition, but the day before Jumia’s IPO, DHL partnered with another e-commerce startup—MallforAfrica.com—to launch its DHL Africa eShop app for global retailers to sell goods to Africa’s consumers markets.
The platform brings more than 200 U.S. and U.K. retailers — from Neiman Marcus to Carters — online in 11 African countries.
DHL Africa eShop operates using startup MallforAfrica.com’s white label service, Link Commerce.
The new online platform takes advantage of the shipping giant’s existing delivery structure on the continent to get goods to doorsteps near and far.
DHL’s partner for the new app, MallforAfrica, was founded in 2011 to solve challenges global consumer goods companies face when entering Africa.
On a B2C level, DHL Africa eShop brings distinct advantages on a transaction cost basis (i.e. the cost of delivery) given it is connected to one of the world’s logistics masters, DHL.
Another component of DHL and MallforAfrica’s partnership is the market for offering e-commerce fulfillment services through MallforAfrica’s white label Link Commerce service.
This could put the duo on a footing to compete with (or work with) big e-commerce names entering Africa and adds another layer of competition with Jumia, which offers its own fulfillment services vertical in Africa.
Cathay Africinvest Innovation Fund
There’s a new $100 million plus African VC fund in the works. Tunisia-based private equity firm Africinvest teamed up with Cathay Innovation to announce the Cathay Africinvest Innovation Fund, with a target raise of $168 million.
Details are still forthcoming, but the fund will focus primarily on Series A to C-stage investments in startups across several countries in the areas of fintech, logistics, AI, agtech and edutech. Investments could begin as early as 2019, fund co-founder Denis Barrier told TechCrunch.
He expects to see strong local showing for startups from across Africinvest’s 10 country offices in North and Sub-Saharan African. The firm will open an office in Johannesburg in the near future, according to a company release.
Zipline expands in Ghana
Zipline, the San Francisco-based UAV manufacturer and logistics services provider, launched a program in Ghana for drone delivery of medical supplies.
Working with the Ghanaian government, Zipline will operate 30 drones out of four distribution centers to distribute vaccines, blood and life-saving medications to 2,000 health facilities across the West African nation daily. Speaking to TechCrunch, the company’s CEO Keller Rinaudo described the Ghana operation as “the largest drone delivery network on the planet.”
The Ghana program adds a second country to Zipline’s live operations. Zipline got off the ground in Rwanda and has leveraged its experience in East Africa to begin testing medical delivery services in the United States. Zipline plans to move from pilot-phase to live-delivery of medical supplies in the U.S. sometime this summer.
ConnectMed acquired by Merck
And finally, German pharmaceutical company Merck KGaa acquired the technology of Kenya based online healthtech company ConnectMed. A 2017 Startup Battlefield Africa competitor, ConnectMed paired up telehealth kiosks to local pharmacies—turning them into online clinics where patients use the startup’s tablet based app to connect live to doctors for evaluation and prescriptions. ConnectMed had received grant and seed funds from UK based Entrepreneur First and Norway’s Katapult Accelerator.
Merck KGaa (not be confused with U.S. pharmaceutical company Merck) took over ConnectMed’s telehealth applications. “Following the handover of the company’s telehealth solutions to Merck…ConnectMed will cease operations,” said a company release on the deal. Merck will integrate ConnectMed’s platform into its own CURAFA clinic network in Kenya.
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