Jumia might be on the verge of a collapse, MTN not selling stake share

Venture Beat reports that Jumia, one of Nigeria’s largest online retailers has allegedly laid off 300 of its workers in Nigeria, which accounts for about 30% of its 1000-person workforce in Nigeria. This has raised concerns as to whether the end is near for the online retailer and what this could mean for the Rocket-funded e-commerce outfit.

The major investor in Jumia, Rocket internet has a reputation for downsizing. In a similar event, Rocket Internet closed some of its offices in Turkey  in 2012, firing 400 workers in the process. While a similar event may be playing out in Nigeria, Kaymu (another Rocket Internet portfolio company) closed its Zambia office. Citing “macroeconomic reasons,” the online shopping platform shut down its operations in Zambia at the beginning of the month.

Despite a $200 million funding chest and a 900 percent sales growth in its Kenyan unit it 2014, Jumia is yet to turn profit since it began operations in Nigeria in 2012. With these news, Africa’s largest telecoms company MTN has refuted claims that it is seeking to sell its shares in Jumia

This comes after Bloomberg reported that MTN is exploring a sale of shares in Jumia and was considering an initial public offering of the online retailer on the Nasdaq or New York Stock Exchange.

“We currently have no plans to dispose of our investment in Jumia in the short term,” MTN Group spokeswoman said in an emailed response to questions.

Bloomberg reported that unnamed sources close to MTN, which controls a 40 percent stake in Jumia, disclosed the company’s intention of taking the internet venture public on either the New York Stock Exchange or Nasdaq. The report also stated that Jumia founders Rocket Internet were open to the idea.

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