Less than two weeks after Jumia deleveraged by collapsing all other companies under the AIG umbrella, the company confirms that it has received GBP50 million investment from CDC.
Commenting on the development, Sacha Poignonnec CEO at Jumia Africa said, “We are very glad to be partnering with CDC. Their proven experience in investing in Africa and their expertise on long-term development will be decisive in building a healthy ecosystem around Jumia, developing and accompanying more and more African businesses and entrepreneurs in this shift towards mobile and online. Today, Jumia already reaches 50 million people every month and there is no doubt CDC will be a crucial partner in extending that reach over the next months and years.”
Jumia had faced series of financial challenges. AIG its parent company in Africa reported a net loss of USD125 million in Q1 2016. Jumia Nigeria itself made close to USD18.8 million in Q1 2016. The company needs investment capital to shore up its cash flow as Jumia is now burdened with all exits of AIG.
Jumia’s major challenge is the ability to operate all the AIG-exits, remain competitive without dissipating energy on areas that will continue to burn its capital. The devaluation and or the new foreign exchange would further affect the eCommerce company’s ability to sell cheaper than brick and mortar competitors.
CDC Group, is a development finance institution owned by the UK government. Till date, Jumia has received funding from MTN, Millicom, AXA, Orange Telecom and Goldman Sachs. Earlier this year, the company valued itself for USD1 billion.
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