Jumia, an e-commerce platform, went public on the New York Stock Exchange in mid-April and immediately reached a valuation of over one billion dollars. While branded by the media as “the first African tech startup" critics asked whether it was genuinely African and whether it represented a sound investment.
Jumia claims to have four million dedicated users, of which about a third are in Nigeria, the company’s largest market. But the company lost one billion dollars between 2012 and 2018 and remains cashflow negative. Sacha Poignonnec, the firm’s CEO, in an interview focussed on the company’s future prospects.
While Africans are its largest cluster of customers, Jumia is incorporated in Germany and headquartered in Dubai. This has led critics to question the company’s African status. The firm has responded that it caters mostly to Africans and that its African character emerges from this fact.
Another tech firm of foreign origin but oriented to African clients, is Boomplay, a Spotify-style music streaming startup, which has an 85 per cent African clientele. The firm is today adding two million new customers a month and has a strong African bent to its music collection. Boomplay is a joint venture by Chinese phone maker Transsion and Chinese consumer apps maker NetEase. It recently raised $ 20 million from investors.
April 30, 2019