AXIAN Telecom aquires 8% stake in Jumia

A Pan-African telecom service provider, AXIAN Telecom, has acquired an 8 per cent stake in e-commerce platform Jumia. According to an announcement by the telecom company on Monday, the minority stake ownership was filed in a beneficial ownership report with the U.S. Securities and Exchange Commission (SEC). 

The company’s CEO, Hassan Jaber, noted that the decisive move stems from Jumia’s achievement in the digital retail infrastructure and fintech through JumiaPay, as well as its logistics strengths. He stressed that the e-commerce company’s unique position to promote financial and economic inclusion attracted AXIAN Telecom, and aligns with its image. 

“AXIAN Telecom’s management is supportive of Jumia’s strategic vision, and we look forward to contributing positively to its growth and success where we can, ” he added.

In addition, the telecom company noted that it remains committed to supporting the development of Africa’s digital economy through investments in companies like Jumia. It explained that such investment complements its core values of delivering accessible and innovative digital services across the continent via its Yas (mobile) and Mixx by Yas (fintech) brands.

AXIAN develops solutions and services for promoting energy, financial, and digital inclusion on the African continent with a focus on Madagascar, Tanzania, and Togo. Axian Telecom is a wholly owned subsidiary of Axian Group Limited, which is present in 32 countries and territories of the Indian Ocean and Africa. 

Also Read: Jumia to exit South Africa, Tunisia and focus on Nigeria, Egypt, Kenya

What this means for Jumia

The investment from AXIAN Telecom, known for its investments in digital infrastructure across Africa, represents a renewed hope for Jumia’s turnaround strategy and long-term potential. The investment also comes amid Jumia’s drop in revenue by 26 per cent year-over-year, or 18 per cent in constant currency, to $36.3 million in Q1’25. 

For this and market competition, the investment will help the e-commerce company to:

• Strengthen the financial strength and growth of Jumia amid its financial challenges, decline in revenues, and exit of major investors. AXIAN Telecom’s backing will look to provide much-needed stability and resources to support its turnaround strategy.
• Influence a renewed investor’s confidence in the company and help shape its future direction.
• Strengthen Jumia’s logistics, digital payment (JumiaPay), and overall e-commerce system through AXIAN Telecom’s expertise in digital infrastructure and fintech.
• Provide the company with a competitive edge above players like Temu, which have been gaining ground in some parts of Africa. 

Jumia’s recent struggles

Over the past few years, the e-commerce company has undergone significant leadership changes. One is the appointment of Francis Dufay as acting CEO in 2022. He was later confirmed as the permanent CEO. Under his leadership, the company has focused on restructuring its strategy aimed at streamlining operations, cutting costs, and focusing on returns.

The company also shut down its operations in underperforming markets such as Tunisia and South Africa – two markets that the firm described as contributing negligibly to the overall business. The company has now focused its direction on high-performing markets, including Nigeria, Kenya, Egypt, and Morocco. 

“After a thorough analysis, we made the difficult decision to close down our operations in South Africa and Tunisia. Competitive and macroeconomic conditions in both markets have limited their growth potential, and their contribution to our overall business has not aligned with expectations,” Dufay said during the announcement of the market exits. 

Alongside its drop its significant drop in revenue during the last quarter, Jumia reported an operating loss of $18.7 million, compared to $8.3 million in the first quarter of 2024, reflecting lower corporate sales and currency headwinds. The adjusted EBITDA loss widened to $15.7 million from $4.3 million in the prior year. 

However, Jumia significantly improved its loss before income tax, which narrowed to $16.5 million, a 58 per cent improvement year-over-year, or 25 per cent in constant currency. This was largely driven by a $33.5 million improvement in net finance results, as the company avoided the high finance costs incurred in 2024 due to currency devaluations in Nigeria and Egypt.