Jumia, the foreign-owned company in Nigeria, files for IPO on the New York Stock Exchange

Jumia, an e-commerce company, founded in 2013 by Jeremy Hodara and Sacha Poignonnec, is scheduled to become the first “African” startup to list on a major global exchange – The New York Stock Exchange. Though Jumia’s African headquarters is located in Yaba, Lagos, Nigeria, the company was incorporated in Germany by non-Nigerians. (Jumia Technologies AG […]

Jumia, an e-commerce company, founded in 2013 by Jeremy Hodara and Sacha Poignonnec, is scheduled to become the first “African” startup to list on a major global exchange – The New York Stock Exchange. Though Jumia’s African headquarters is located in Yaba, Lagos, Nigeria, the company was incorporated in Germany by non-Nigerians. (Jumia Technologies AG has its Corporate Headquarters in Charlottenstrasse 4, Berlin, Germany.) Jumia operates in Africa and the Middle East (United Arab Emirates) with an estimated 4000 employees. Jumia made some history in 2016 when it became the first African startup unicorn by achieving a valuation of $1 billion following huge investments from Goldman Sachs, CDC, AXA, MTN, the Millicom Group, Orange, and others. The gains from investment enabled Africa Internet Group (AIG), Jumia Market’s parent company, to bring all its known e-commerce companies under the Jumia name. This was on 23 June 2016.

 

The Jumia story is a good and bad one for Nigeria (Africa). Good because it provides some employment for Nigerians, as well as a platform where Nigerians could conveniently and reliably order merchandise. Bad because Nigeria really can’t take credit for Jumia’s success, as the brains behind the venture are white foreign people. Obviously, I do not have anything against white people; it’s just that the Jumia story doesn’t really help the African narrative. For all we care, Jeremy and Sacha are in Nigeria to make money. After all, there is the same Jumia in United Arab Emirates, and potentially in many countries in Africa – Ghana, Cameroun, and Egypt. Nevertheless, on average, I still think it’s somewhat positive for Nigeria; it is just not as great as if the venture had been conceived and realized by Nigerians, or even a black African outside of Nigeria. May be Jumia would have been able to pull it off the way it has if the founders and managers had been black, but it would have exponentially been more difficult with the same skill; and hence would have had a different meaning for Africa and Africans.

Moreover, it is somewhat disappointing to observe that none of the high-ranking people at Jumia is a Nigerian or even a black person – not a single one: Jeremy Hodara, George Bejjani, Guillaume Rethore, Sacha Poignonnec, Mamoun B., Alastair Croker, Chloé Samyn, Antoine Maillet-Mezeray, Sami Louali, Antoine Maillet-Mezeray, Benjamin de Fouchier, and Fanny Ponce; none of these people looks like those who are making them rich by patronizing Jumia.

Having made the foregoing statements, it’s my hope that the founders of Jumia would be responsible enough to operate a good business in Nigeria in terms of getting the locals involved in the top administration of the company, so it doesn’t feel like colonialism all over again. When compared to China or India, Nigeria has a more friendly business environment for foreigners in terms of protectionism – though I do not know how sensible this is on the part of the Nigerian government from the perspective of national development. At any rate it is the hope that foreigners will not abuse this apparently accidental albeit risky gesture.

On a more positive note, Jumia has recruited a Nigerian in the diaspora, Andre Iguodala, a key member of the Golden (New Jersey) State Warriors basketball team in the US, as a member of its board of directors. I like this development, as it signals sensitivity on the part of Jumia. According to Techcrunch.com, this is how Iguodala sees his involvement with Jumia: “For me, it’s really important because I have a lot of roots in Africa with my father being from Nigeria. I’m proud of that and willing to do a lot of things with a company that’s on the forefront of the e-commerce space as a whole.”

Other businesses – competing and otherwise – can learn from the experience of Jumia regarding what needs to be done to realize the potential that e-commerce holds for Africans.  Jumia will be bringing in international expertise in this sector, as it implements the results of its research.

What do we know about the co-founders of Jumia? Jeremy Hodara is approximately 37 years of age.  This is the short biographical sketch that Bloomberg has on him: “Mr. Jeremy Hodara has been serving as Co-CEO and Member of Management Board at Jumia Technologies AG since 2012. He serves as a Managing Director of Africa Operations. He also serves as a Managing Director of Jumia at Rocket Internet SE. Previously, Mr. Hodara served as the Managing Director of Africa Internet Group at Rocket Internet SE. He has been responsible for Rocket Internet’s France office since 2012. Hodara worked at McKinsey & Company for seven years where he focused on retail and e-commerce. Mr. Hodara earned a master’s degree in business management from the HEC School of Management in Paris, France.” Sacha Poignonnec has been Co-Founder and Co-CEO of Jumia from 2012 till present. He was Associate Principal at McKinsey & Company in Paris and New York (2007 – 2012), and a Manager at Aon – Accuracy (2004 – 2007), as well as an Associate at Arthur Andersen (2002 – 2004). Poignonnec received a Master’s degree in Finance from EDHEC Business School in Nice, France (1992 – 2002).