BREAKING – Germany’s Rocket Internet Completely Exits Jumia [Updated with Video]

BREAKING – Germany’s Rocket Internet Completely Exits Jumia [Updated with Video]

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This is hard news: Germany’s Rocket Internet has exited Jumia. Within  the window it sold, from Nov 8 2019 to say early February 2020, Jumia’s highest stock value was about $8.50. That is still a huge drop when you consider that the stock rose to $49.77 shortly after IPO before it lost steam. Jumia closed at $2.58 today after losing more than 8% of its value. This sector remains a challenge in Africa, and not an electronic business, as the marginal cost is all physical. The sector challenges are well documented in this seminal Harvard Business Review piece I wrote a few years ago.

German tech investor Rocket Internet RKET.DE said on Thursday it had sold its stake in African ecommerce company Jumia JMIA.N, which has seen its shares steadily fall since they listed last April on Wall Street.

Rocket Internet, which had held an 11% stake in Jumia as of Nov. 8, sold its holding between then and the onset of the coronavirus crisis, Bettina Curtze, the firm’s head of finance and investments, told journalists, declining to be more precise.

Curtze declined to reveal what proceeds Rocket Internet made from the sale, but said they were included in the 2.1 billion euros ($2.30 billion) of net cash the company had as of March 31.

Jumia shares soared when the company became the first African tech stock to list on Wall Street on April 12 but tumbled a month later after Citron Research, run by short-seller Andrew Left, questioned some of its sales figures.

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6 thoughts on “BREAKING – Germany’s Rocket Internet Completely Exits Jumia [Updated with Video]

  1. The ecommerce space is not for the faint-hearted in Africa, because you are trying to fuse three seemingly contradictory things together: scaling, keeping operational costs low, while keeping costs of items sold low as well; a super difficult triangulation…

    To do well, you have to see loss-making as an art, and may even attempt achieve veteran status in it, before you can rise.

    Amazon’s valuation is soaring in the midst of Covid-19 pandemic, while that of Jumia is rolling on the floor.

    As always, what keeps a business above or below water isn’t found in any textbook or university, rather it’s hidden somewhere, only that the road to that place has no maps…

    The dry bones shall rise again.

    Reply
    1. I am always amazed at your insights into insights (Tekedia materials).

      Trying to find what keeps a business above water is not in any book or institution.

      Sheer luck might just be the answer.

      Reply
  2. The real reason Jumia is drowning is not related to Africa’s peculiarities but how Jumia chooses to trade in Africa. Yes, all common factors affecting business growth in Africa, checked, however Jumia’s downfall is rather self inflicted and peculiar to its Management’s strategy.

    You may say, but it’s not only Jumia who runs this business. I ask, how do others choose to run it that Jumia is ahead of them in the first instance? A business thrives when the real king-customer is really calling the shot. Ire o!

    Reply
      1. I think he is referring to the real management. As Jumia just uses natives to front as the real management, hence the full decision does not lie on the slave-customer, but the real customer.

        Reply

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