Online shopping platform Jumia is, through its majority shareholder MTN Group Ltd, is planning an initial public offering in the US.
According to reports by the Bloomberg, MTN targets to accumulate as much as USD600 million (Ksh60 billion) while the listing could see Jumia valued at USD1.5 billion (Ksh150 billion).
Currently, Jumia operates in 13 African countries including Nigeria, Kenya, Egypt, Ivory Coast, South Africa and Morocco. Others include Uganda, Tanzania, Ghana, Cameroon, Algeria and Tunisia.
A listing in the US LPO will float the retailer in the global limelight, as it seeks to recover from loss making.
Jumia sunk deeper in losses last year, posting a Ksh14.9 billion loss before tax and other costs in the year ended December 2017, compared to Ksh11.3 billion a year earlier.
In the listing, MTN and Jumia are looking to convince investors in the US using the potential of 1.2 billion people who do not have internet access in Africa so far.
In Africa, there are only 360 million active internet users, but very few rely on online shops citing trust issues.
“Like every other region, Africa has its own challenges but the internet users [in Africa] are more than that of the US, UK and actually, both of them combined. The number is behind only India and China,” said Gaurav Jain, Head of Vendor Success, Jumia Group as quoted by Ecommerce IQ.
According to Bloomberg, the listing will help MTN reduce debt, which increased to Ksh509 billion in June last year from Ksh417 billion at the end of 2017.
“The rising liabilities and a dispute over non-payment of back taxes in Nigeria is weighing on the company’s share price, which has fallen by almost a third in the last 12 months,” reports Bloomberg.
Other Jumia shareholders include Goldman Sachs Group Inc., Millicom International Cellular SA, Orange SA and Africa Internet Group, a venture backed by Goldman, MTN and Rocket Internet SE.