(Bloomberg) — Jumia Technologies AG founders Sacha Poignonnec and Jeremy Hodara both quit as co- heads of the Africa-focused online retailer, which has struggled with persistent losses since a high-profile New York listing.
(Bloomberg) — Jumia Technologies AG founders Sacha Poignonnec and Jeremy Hodara both quit as co- heads of the Africa-focused online retailer, which has struggled with persistent losses since a high-profile New York listing.
Poignonnec and Hodara, former colleagues at McKinsey & Co., founded Jumia in Lagos in 2012 as a way to introduce e-commerce to Nigeria and other African countries where widespread internet use was starting to take off. Often compared with Amazon.com Inc., the company attracted international investors such as Mastercard Inc. and French drinks maker Pernod Ricard SA to achieve unicorn status, and the stock surged 75% on its US stock market debut in 2019.
Yet a plan to progress to profitability hasn’t materialized. The company struggled with Africa-specific issues such as a lack of formal addresses and city mapping, while expansion into the likes of food delivery failed to yield a step change. And then there’s Amazon, which is considering expanding more on the continent.
Jumia’s stock has duly suffered, languishing 71% below its value at the initial public offering. The shares slumped further following the announcement of Poignonnec and Hodara’s departure, closing 14% lower in New York on Monday.
‘More Focus’
“We want to bring more focus to the core e-commerce business as part of a more simplified and efficient organization with stronger fundamentals and a clearer path to profitability,” Jumia Chairman Jonathan Klein said in a statement on Monday.
International e-commerce giants have been wary of expanding their reach into Africa, where postal and transportation services are often unreliable and doing business is made complicated by bureaucracy and graft.
Amazon has offered cloud services from its base in Cape Town for some years, but is only now planning to venture into online retail — first in South Africa before approaching Nigeria, Africa’s most populous country, according to media reports.
While Jumia’s IPO at first attracted a surge of interest, a damning report by short sellers Citron, who alleged fraud, sent the stock into a downward spiral. The company later reported that it had identified improper transactions within the Nigerian sales force, where orders had been placed and subsequently canceled.
Francis Dufay, who has held various leadership roles at Jumia since 2014, has been appointed acting CEO, according to a statement Monday. A search for a permanent replacement for the former leaders is underway.
–With assistance from Loni Prinsloo.
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