Africa Internet Group, AIG the parent company of Jumia, is taking drastic steps to steer itself from debt into future profitability.
The company is packing all its subsidiaries under its Jumia operations. AIG had in the past three years floated series of startups with separate business operations. Until now, the group has in its kitty Jumia, Jovago, Everjobs, Lamudi, Carmudi, Easy Taxi, Hello Food, Vendito, Kaymu and other smaller players.
While the company has not denied nor confirm this information, Rocket Internet, the parent company had its Q1 2016 financial report had stated that its AIG unit is indebted to the tune of USD125 million. Rocket Internet stated in the report that it might take up to 2018 for Jumia to make profit. The projection actually insinuated this development because the company was already reffering to all its AIG companies as Jumia.
In the same report, Rocket Internet mapped out a strategy to reduce its piling debt and get out of businesses that are not likely to make profit for the group.
This development is expected to lead to a massive job cuts as most staff under former companies companies might be laid off. Rocket The company had shut down Easy Taxi, a competitor to Uber, laying off all its workers.
The strategy to make Jumia a more robust eCommerce platform is not bad in itself. However, it is very certain that some of the companies will no longer exist either under Jumia or alone. AIG might be focusing on its competitive advantage to deploy resources accordingly. Konga, Jumia’s arch-rival has only focused on eCommerce and expanded its marketplace. KongaPay its mobile wallet still benefits from the Konga mother-brand. It is possible Jumia is also learning from its competitor.
In early February, AIG had valued itself at USD1 billion. With this latest move it is unclear what the new valuation of the company will be.
Till date, AIG has received funding from MTN, Millicom, AXA, Orange Telecom and Goldman Sachs. Rocket Internet its parent company, is an eCommerce-focused holding company with over 100 companies operating across over 11o countries in Africa, South East Asia, Middle East and Europe. The company is headquartered in Berlin Germany. Its staff headcount is over 36,000 globally.
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