Jumia Technologies AG, Africa’s leading e-commerce platform, has successfully concluded its at-the-market (ATM) equity offering, raising $99.6 million in gross proceeds. The offering, which involved the sale of over 20.2 million American Depositary Shares (ADSs), marks a significant boost to the company’s financial standing as it navigates a challenging macroeconomic environment.

In a statement, Jumia CEO Francis Dufay expressed optimism about the capital infusion: “Raising $99.6 million in gross proceeds provides Jumia with additional capital to strengthen our balance sheet and accelerate our growth trajectory as we progress along our path to profitability.”

Proceeds from the offering, which was facilitated by RBC Capital Markets, LLC and Berenberg Capital Markets LLC, will be used for general corporate purposes. These include customer acquisition, expanding the company’s supplier base, scaling its logistics network, and enhancing its marketing and vendor technologies.

The capital raise by Jumia through the ATM equity offering comes in the wake of its financial results for the first half of 2024, where the company reported $85.37 million in revenue — a slight increase from $85.28 million in the same period the previous year. While revenue remained stable, Jumia’s journey to profitability continues to be hindered by currency depreciation in key markets like Nigeria and Egypt, which has significantly impacted earnings.

The company’s revenue is driven primarily by first-party sales, third-party commissions, and fulfillment services. Growth in third-party commissions, particularly from corporate sales in Egypt, provided some relief, but this was largely offset by the sharp devaluation of the Nigerian Naira and Egyptian Pound.

Both Nigeria and Egypt, two of Jumia’s largest markets, are grappling with severe economic challenges. Egypt’s currency crisis deepened in 2024, with the Egyptian Pound losing 55% of its value due to IMF-backed reforms. Meanwhile, Nigeria’s Central Bank unified exchange rates, leading to a 71% devaluation of the Naira. These economic shifts have squeezed Jumia’s profit margins and created an uncertain business environment.

Despite these obstacles, Jumia has implemented cost-cutting measures to improve its financial outlook. The company reduced fulfillment expenses by 16.6%, down to $18.7 million, and cut sales and advertising costs by 24.5%, reflecting a shift toward more organic growth strategies.

Jumia’s performance across its key markets has been mixed, reflecting the economic volatility in different regions. North Africa, led by Egypt, saw significant growth, with revenue climbing from $32.03 million in 2023 to $38.35 million in 2024. In contrast, West Africa, where Nigeria plays a central role, experienced a decline, with revenue dropping from $40.91 million to $36.11 million over the same period. Revenue in East and Southern Africa remained relatively stable, with a slight decrease from $11.83 million to $10.67 million.

Since listing on the New York Stock Exchange (NYSE) in April 2019 under the ticker “JMIA,” Jumia has focused on long-term growth across its 11 operating countries in Africa. The company’s logistics network and its proprietary payment platform, JumiaPay, remain central to its expansion strategy. JumiaPay, which facilitates secure transactions, has become a critical component of the company’s ecosystem, enabling smoother interactions between buyers and sellers across multiple markets.

However, Jumia’s continued reliance on external funding highlights the challenges of achieving profitability in a volatile market. 

For now, the capital raise by Jumia through the latest offering represents a positive step toward stabilizing its financial position as it works to achieve profitability and secure its foothold in Africa’s competitive online marketplace.

Note: 

1. American Depositary Shares (ADS) are essentially shares of a foreign company that are traded on U.S. stock exchanges. They make it easier for U.S. investors to buy and own shares in foreign companies without having to deal with the complexities of foreign markets.
2. An at-the-market (ATM) equity offering is a way for a publicly traded company to raise capital by selling new shares gradually into the open market over time, at the prevailing market price. It’s a more flexible and less costly method compared to traditional methods of issuing shares.