Mastercard Invests $56M In Jumia Ahead Of NY Stock Exchange IPO
The investment improves the online retailer’s chances of a successful initial public offering in New York, according to Bloomberg.
Listen to GHOGH with Jamarlin Martin | Episode 7: Tayo Oviosu
Jamarlin Martin catches up with Tayo Oviosu at SXSW 2018. Oviosu is the Founder and CEO of Paga, the leading mobile payments company in Nigeria.
The loss-making Jumia, which has around four million customers across 14 African markets, is the first African tech unicorn, and is set to become the first African startup to list on the New York Stock Exchange, according to Techcrunch.
E-commerce growth in Africa has been immense, with the market growing from $8 billion in 2013 to a projected $50 billion in 2018, according to Intracen.
The percentage stake that Mastercard now owns has not yet been disclosed.
In December, French drinks company Pernod Ricard SA bought 5.1 percent of Jumia for around $84.2 million, according to TechinAfrica.
Calculating the potential Mastercard stake based on figures from the Pernod Ricard deal would mean that the credit card company could own around 3.39 percent of the African tech business.
Jumia appears set to sell 13.5 million American Depository Shares at between $13 and $16 each, according to Bloomberg. This listing could therefore raise as much as $216 million for the online retailer.
The initial public offering will take place on Apr. 12.
Mastercard assisting Jumia to grow
As part of the deal, Mastercard will partner with Jumia to grow its operations in Africa.
Across its 14 African markets, between 65 and 95 percent of all Jumia orders are paid for using cash on delivery, according to a Mastercard press release.
The credit card firm’s partnership with Jumia will be geared at delivering cashless e-commerce solutions for users to pay for goods more easily.