Jumia IPO’d on Friday, April 12th on the New York Stock Exchange. When news of its IPO first hit the wires, it was hailed as Africa’s first tech IPO. I will admit that I immediately bought into the narrative.
After all, I knew that it was (at one point) run by 2 Nigerian founders, Tunde Kehinde and Raphael Afaedor, and that, of course, it serves entirely African markets. Sounds like an African company to me! And if an African tech startup can exhibit a viable exit for investors, this $JMIA story could only help funnel more interest and capital to the entire African ecosystem. That is why the story really excited me.
But by their own admission, $JMIA is not an African company after all. They are not headquartered in Africa, but in Europe. The company was not founded by Kehinde and Afaedor. Rather, those guys were hired to run Rocket Internet’s new e-commerce business it created and named Jumia. Given this (new to me) information, Jumia is very clearly not an African company. And that is OK! I’m not sure why the current executives feel the need to co-opt a brand identity that is not theirs. (And before you go there, Rocket Internet is also a European company.)
Unfortunately, I believe this narrative actually hurts the African ecosystem more than it helps. Because venture capital is such a pattern seeking (copy cat) business model, non-white, non-male founders have historically had much difficulty securing much needed funding to expand their businesses. My initial thoughts were that an actual exit evidenced by this $JMIA IPO will help convince investors that startups on the continent are viable investments. However, $JMIA merely reinforces the stereotypes that white male executives of a company domiciled in the West are the business models worthy of investment. This couldn’t be further from the truth.
I have been investing in African startups since 2012. And I am currently in stealth mode to expand this work on a larger scale. Stay away from African as an investment ecosystem if you want to. It only leaves more for me and mine. My friend and founder, Teddy Ruge, who of course opened my eyes to the real narrative around $JMIA sums it up best:
We keep building ??
Sources:
Jumia F-1 Statement (SEC)
Jumia investors may regret chasing an elusive dream (The Africa Report)