Jumia has just received a huge financial boost ahead of its proposed IPO on the New York Stock Exchange (NYSE). Global financial giant, MasterCard has invested €50 million ($56 million) into the ecommerce company.
The deal was completed as a concurrent private stock sale. In other words, price per share of the MasterCard investment will be equal to any amount investors peg the share price of Jumia when it lists on the stock market.
Jumia on its own part has called the deal a “strategic partnership to grow e-commerce operations and support the digital transformation” of Africa.
We are delighted to strengthen our existing partnership with MasterCard, and consolidate Jumia’s position as the leading e-commerce platform in Africa. This investment highlights the strategic synergies between the two companies, as we both seek to develop the payments ecosystem and drive financial inclusion across Africa.
MasterCard sees the deal as a fulfilment of its growing commitment to digital Africa.
“This partnership with Jumia underpins MasterCard’s commitment to transforming Africa’s digital payments landscape,” says Elcin Yanik, MasterCard EVP for Africa and the Middle East. “In recent years, we have invested heavily in technology, people and local markets, and have seen tremendous growth in online payments in particular. We look forward to working with Jumia to enhance the region’s digital infrastructure and ecosystem.”
MasterCard Investment a Boost To Jumia IPO
Overall though, the Mastercard investment means a lot for Jumia’s IPO pursuit. Although no timeline has been shared for the IPO debut, the latest investment should increase its confidence when it gets on the road to woo investors.
Meanwhile Jumia has already set a price range for its stock listing according to a recent version of its IPO filing with the SEC. The company will offer 13.5 million units worth of shares and projects a share price between $13 and $16.
Using this projection, the African startup could raise between $176 million and 216 million from its IPO. If this happens, the company would still retain its unicorn status with a valuation of around $1.1 billion. Of course IPO reality could either increase or decrease its share price, thus affecting its valuation.
Either way, the amount being targeted from the IPO is a far cry from the figures touted earlier this year. According to a report by Bloomberg, MTN, one of Jumia’s largest shareholders, was seeking to raise $600 million from the IPO.
Now we wait for the roadshow and subsequent listing.
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