Jumia completes $99.6 million equity offering to fuel growth

LAGOS - Jumia Technologies AG (NYSE:JMIA), a prominent e-commerce platform in Africa, announced today the completion of its "at-the-market" equity offering. The transaction involved the sale of 20,227,736 American Depositary Shares (ADSs), generating $99.6 million in gross proceeds before commissions and offering expenses.

The company, which operates across 11 African countries, stated that the capital raised will be directed toward general corporate purposes. These include customer acquisition, expansion of its supplier base, scaling of its logistics network, and enhancements to marketing and vendor technology.

Jumia CEO Francis Dufay expressed satisfaction with the outcome of the offering, emphasizing that the additional capital will "further strengthen our balance sheet and help us to accelerate our growth trajectory as we progress along our path to profitability."

The equity offering was facilitated by RBC Capital Markets, LLC and Berenberg Capital Markets LLC, acting as the company's agents. The prospectus supplement for the sale was filed with the Securities and Exchange Commission on August 6, 2024.

In its mission to enhance the quality of everyday life in Africa, Jumia leverages technology to provide innovative, convenient, and affordable online services. The platform boasts a marketplace connecting over 64,000 sellers with customers, an extensive logistics network for package shipment and delivery, and JumiaPay, a proprietary payment service that facilitates transactions on the platform in select markets.

This announcement includes forward-looking statements, and the company cautions that actual outcomes and results may differ materially from those projected due to various risks and uncertainties. These are detailed under the "Risk Factors" in Jumia's registration statement on Form F-3 and other documents incorporated by reference.

The information provided is based on a press release statement from Jumia Technologies AG.

In other recent news, Jumia Technologies AG reported a mixed second quarter of 2024 amid market challenges. Despite headwinds, the leading e-commerce platform in Africa reported a 6.9% year-over-year growth in orders and a 35% rise in Gross Merchandise Volume (GMV) in constant currency terms. However, due to currency devaluations in key markets like Nigeria and Egypt, GMV in USD terms fell by 5%, and revenue saw a decline of 17.2% year-over-year, standing at $36.5 million. Despite these challenges, Jumia saw improvements in active customers and repurchase rates and remains focused on its strategic goals. The company is optimistic about tapping into the African market and is working on reducing cash burn, with a focus on cost management and finance cost reductions. Jumia aims to reduce cash utilization and increase orders and GMV in 2024 and is working towards profitability with an initiated equity offering to support growth efforts. Expansion beyond capital cities is a strategic focus, with secondary cities showing increased order fulfillment through pickup stations.

InvestingPro Insights

As Jumia Technologies AG (NYSE:JMIA) fortifies its financial position through a recent equity offering, investors are closely monitoring the company's performance metrics and market valuation. According to InvestingPro data, Jumia holds a market capitalization of approximately $600.07 million. Despite the company's impressive gross profit margin of 60.09% over the last twelve months as of Q2 2024, it's worth noting that Jumia is not expected to be profitable this year, which is reflected in its negative P/E ratio of -4.72.

InvestingPro Tips suggest that Jumia's stock price has experienced significant volatility, with a price total return of -63.65% over the last month. However, looking at the broader picture, the stock has delivered a high return over the last year, with a 60.66% price total return. This volatility is something potential investors should consider, especially those looking for more stable investment options. For those interested in exploring Jumia's financials further, InvestingPro offers additional tips, with a total of 11 detailed insights available on their platform.

While Jumia's strategy includes expanding its logistics network and investing in technology, it is important for investors to keep in mind that the company trades at a high Price / Book multiple of 23.49, signaling that the stock might be valued richly relative to the company's book value. This, combined with the company's recent capital raising efforts, could influence investor sentiment and future stock performance.

The insights provided by InvestingPro are instrumental for investors who aim to make informed decisions based on real-time data and expert analysis. With continuous updates on key financial metrics and professional tips, InvestingPro serves as a valuable resource for those keeping an eye on Jumia's market activity and growth prospects.

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