Jumia Technologies AG, Africa’s leading e-commerce platform, announced on Tuesday its plans to raise EUR 244 million ($268 million) through a rights issue. This initiative is part of Jumia’s strategy to bolster its financial standing and drive expansion efforts across the continent.
The rights issue aims to solidify Jumia’s market presence and invest in crucial areas such as technology, logistics, and customer acquisition. Jumia’s current share capital stands at EUR 244,925,650.00, divided into 244,925,650 ordinary bearer shares with no par value.
The proposed rights issue will allow existing shareholders to purchase additional shares at a discounted price, ensuring they can maintain their proportional ownership. This initiative requires shareholder approval and follows German corporate law provisions, permitting the management board, with the supervisory board’s consent, to increase share capital within a five-year period.
In June, Jumia’s shareholders authorized the management board to increase share capital by up to EUR 98,945,871.00 until June 2029. Following a partial utilization of this authorization, Jumia can still issue an additional EUR 58,490,399.00 in new shares.
Funds raised from the rights issue will be allocated to several strategic initiatives:
- Technological Infrastructure: Enhancing the platform’s technological infrastructure to improve user experience and operational efficiency.
- Logistics Network: Strengthening the logistics network to ensure faster and more reliable delivery services.
- Marketing Efforts: Scaling up marketing efforts to attract new customers and retain existing ones.
- Financial Stability: Fortifying the company’s balance sheet to support financial stability and flexibility.
Existing shareholders will have the option to subscribe to new shares in proportion to their current holdings, allowing them to maintain their ownership stake. The rights issue price will be set at a discount to the market price, presenting an attractive investment opportunity. Jumia’s management and supervisory boards will oversee the execution of the rights issue to ensure transparency and regulatory compliance. The company has committed to providing regular updates to shareholders on the progress and impact of the capital increase.
In addition to the rights issue announcement, Jumia released its financial statement for Q2 2024, revealing an 8% reduction in operating loss for the quarter. The company posted a $20.2 million operating loss in Q2 2024, compared to the $22.1 million recorded in the same period last year. However, revenue for the second quarter stood at $36.5 million, down from $44 million in the same period last year.
Jumia’s CEO, Francis Dufay, expressed confidence in the company’s strategy to cut losses and move towards profitability. He highlighted Jumia’s deep understanding of the African e-commerce market and its unique asset base and strategy as key factors positioning the company for growth and success on its path towards profitability.