Ten days after it announced it would sell 20 million ordinary
shares in a secondary transaction, Jumia ($JMIA) has closed the sale after
reaching its funding target.
According to a securities filing , the gross
proceeds from the sale amounted to $99.6 million. The filing suggests an
average share price of around $4.95 per share, slightly above Friday’s trading
price of $4.90. On Monday, it was reported that liquor and wine
maker Pernod Ricard bought 1.27 million ordinary shares valued at around $6
million.
At least one Wall Street analyst estimates that Jumia will lose
$65 million for the full year 2024 and in Q2 2024, its cash position stood at
$92.8 million.
Raising $99 million will significantly improve Jumia’s cash
position.
Jumia did not immediately respond to a request for
comments.
The e-commerce giant will use the funding to finance
ongoing efforts to acquire more customers, and expand its supplier base and
logistics network. It will also invest in improving the technology that
supports its vendors and marketing vertical—a value-added service that it has
been extending to its customers since 2021.
Despite missing its revenue targets in Q2 2024, investors remain
bullish on Jumia’s ability to crack Africa’s e-commerce market. The company
will need all the conviction it can get.
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