5 Exciting Impact the Jumia IPO Will Have on Africa

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5 Exciting Impact the Jumia IPO Will Have on Africa5 Exciting Impact the Jumia IPO Will Have on Africa

It is no longer news that Jumia has listed its shares on the New York Stock Exchange – the biggest stock exchange in the world.

The listing on the exchange generated diverse opinions and mixed reactions on social media and major news platforms.

Prominent among them is the question about the African identity of Jumia. The eCommerce company has explained the reasons it listed on the exchange and also cleared the air on its identity.

Beyond this, the Jumia IPO will no doubt benefit or have a positive impact on Africa, Africans and African businesses. We discuss some of the benefits of the IPO.

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Change perception about doing business in Africa

Compared to other parts of the world, it is relatively cumbersome and tough to do business in Africa. Regardless, Jumia has weathered the storm, survived in over six years; it is present in 14 countries and has become the first African Tech company to list its shares on the New York Stock Exchange. The growth trajectory has been massive despite the many challenges of doing business on the continent. The World Bank Ease of Doing Business 2018 report backs this up with Nigeria ranked 146, Ghana – -114, Egypt – -120 and Uganda – -127. Meanwhile, Kenya, South Africa, Morocco and Mauritius scored 61, 82, 60, 20 respectively, thus performing reasonably well.

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The IPO simply reveals that it is possible to do business in Africa despite the infrastructure deficits al and developmental shortcomings.

Reinforce the aspirations of young African entrepreneurs

There are millions of young entrepreneurs across Africa taking advantage of technology to tackle one social problem or the other. It is a topsy-turvy ride for many because being a young entrepreneur especially in Africa will drain you. So if you want to reinforce your aspiration as a young African entrepreneurs, look no further than Jumia. Before the eCommerce firm arrived at the IPO bus stop, it encountered a lot of challenges which it conquered and it is still conquering. You can also vanquish these challenges and become the ‘Jumia’ of your own sector.

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Opportunity to raise capital by leveraging on the Jumia IPO

Capital is the live wire of any business. African founders and startup are in search of capital to fund their businesses. They are actually raising this capital.

For instance, the 2018 venture investment report by WeeTracker shows that African startups raised a total of $725.6 million across 458 deals. With the Jumia IPO, it will boost investor confidence thus encouraging them to put their money in African startups. Although African founders may not go the Jumia route, it sure serves something to ride on to pitch to potential investors about funding your idea or project.

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Attract more investors to the continent

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Venture capitalists and angel investors are always scouting for businesses to invest in. This year alone, African startups have raised millions of dollars and venture funds also worth millions of dollars are being established to find innovative solutions to some of Africa’s problem. The bar will be raised even higher with the Jumia IPO encouraging potential investors to invest in African startups because a well-run and managed company called Jumia has literarily survived Africa and eventually become the first startup to list its shares on the world’s biggest stock exchange.

A chance for Jumia to consolidate on its innovative products and services

Jumia is present in 14 African countries, has over 5,000 employees, and serves millions of customers across these markets. It is called the Alibaba of Africa. This IPO is like a pledge to Africa and Africans that Jumia is here to stay in the continent and will consolidate on its products and services. With the IPO comes more responsibility to the customers, investors and shareholders. And of course, Jumia is ready to serve and deliver to each one of them through its creative and innovative offering in travel, food, shopping, and payment among others.

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