The once-bright promise of Jumia Technologies, Africa’s largest e-commerce platform, has dimmed further with the complete withdrawal of one of its earliest and most prominent backers. Edinburgh-based investment firm Baillie Gifford & Co, known for its patient capital approach to high-growth companies, has sold off its entire stake in the New York-listed retailer, according to a May 5 securities filing. The move marks the end of a six-year relationship that began with great optimism but ultimately succumbed to the harsh realities of doing business in Africa’s challenging markets.

The numbers tell a story of steadily eroding confidence. As recently as November 2024, Baillie Gifford held 18.13 million Jumia shares, representing a 7.4% stake. By early May, that position had been liquidated entirely — a dramatic finale to what had been a gradual retreat. The firm’s ownership had already declined from its peak of nearly 20 million shares in early 2022, when it controlled about 10% of the company. This downward trajectory mirrors Jumia’s own fortunes: once valued at over $3 billion following its 2019 IPO, the company now sports a market capitalization of just $404 million, with its shares trading around $3.30 — a staggering 95% below their 2021 high.

Several factors likely contributed to Baillie Gifford’s decision to cut ties completely. Jumia’s persistent inability to turn growth into profits has tested even the most patient investors. While the company reported a 21% year-over-year increase in orders for the first quarter of 2025, revenue actually fell 26% to $36.3 million as operating losses more than doubled. The African e-commerce pioneer continues to grapple with currency volatility in key markets like Nigeria and Egypt, where sharp devaluations of the naira and pound have eroded dollar-denominated earnings. At the same time, competition from deep-pocketed Chinese rivals like Temu has forced Jumia into margin-crushing price wars.

Baillie Gifford’s exit forms part of a broader strategic recalibration at the firm. This week, the company announced the departure of Praveen Kumar, manager of its £313 million Shin Nippon investment trust. The Japanese small-cap fund, which Kumar had run since 2015, has dramatically underperformed its benchmark in recent years, returning -36.4% over five years compared to the MSCI Japan Small Cap Index’s 20.5% gain. “There was clearly a stock selection problem,” noted James Carthew, head of investment company research at QuotedData. These changes suggest Baillie Gifford is reassessing its appetite for the kind of high-risk, high-reward bets that once defined its portfolio.

For Jumia, the loss of such a longstanding institutional supporter couldn’t come at a more precarious moment. The company’s cash reserves dwindled by $23 million last quarter, leaving it with about $111 million — enough to fund operations for roughly five more quarters at the current burn rate. While CEO Francis Dufay points to encouraging metrics like a 15% increase in active customers and a 61% expansion of international seller listings, these gains have failed to translate into financial sustainability. The collapse of Jumia’s high-margin corporate sales business in Egypt, previously a profit engine, has left a hole that consumer transactions haven’t been able to fill.

The broader implications extend beyond one company’s struggles. Baillie Gifford’s retreat reflects growing institutional skepticism about the viability of the African e-commerce model, where logistical hurdles, payment fragmentation, and macroeconomic instability continue to thwart even well-capitalized players. As global investors become more discerning about where they deploy capital in emerging markets, Jumia’s experience may serve as a cautionary tale about the challenges of scaling tech-enabled businesses on the continent.

What comes next for Jumia remains uncertain. The company could seek to raise additional capital, though doing so at its depressed valuation would be painful for existing shareholders. Alternatively, deeper cost cuts might extend its runway but potentially at the expense of growth. One thing seems clear: with its most patient backer now gone, Jumia’s margin for error has never been thinner. The coming months will test whether Africa’s e-commerce pioneer can finally crack the code to sustainable operations — or whether it will join the growing list of promising African tech ventures that ultimately couldn’t withstand the continent’s formidable business challenges.

The story of Baillie Gifford and Jumia serves as a microcosm of a larger shift in global investment trends. After years of enthusiasm for growth at any cost, markets are increasingly rewarding clear paths to profitability — a standard that has proven frustratingly elusive for many emerging market disruptors. As this new reality sets in, both investors and entrepreneurs may need to recalibrate their expectations about what success looks like in the world’s most challenging business environments.