retailer Jumia has secured $26 million (€20 million) to expand into additional markets in Africa.
Like its American forebear, Jumia sells a wide range of goods at low cost with easy delivery and returns. The retailer is currently active in Nigeria, Egypt, and Morocco and sells clothing, electronics, furniture, books, baby products, cosmetics, home appliances, and even booze. Rather than paying online, shoppers can pay at their doorstep.
Jumia launched about a year ago out of Rocket Internet and quickly grew its customer base. Many of Africa’s e-commerce companies focus their operations in South Africa, where the economy and access to technology is the strongest. However, e-commerce is still a tricky issue in Africa, as payment technology and Internet connectivity are not strong and many consumers don’t have smartphones, computers, or extra money to spend shopping online.
Although Internet and mobile penetration still has a long way to go in Africa, the rates are climbing, particularly in the mobile sector. A growing middle class means more opportunities for business are arising.
“There is very much a demand from the growing middle class to have quality products both in beauty and in fashion that is currently not met in the Nigerian market or in many other African countries,” said Rocket Internet CEO Stiegeler in an interview with VentureVillage. “That means that either they buy things abroad or have other people ship the product in, which is obviously very time-consuming, expensive and tedious.
Rocket Internet is a Berlin-based incubator program that has been a fervent supporter of African startups. It has a commercial presence in Egypt, Morocco, the Ivory Coast, Ghana, Nigeria, Kenya, and South Africa. Furthermore, Rocket Internet CEO Leonard Stiegeler was actually one of the founders of Jumia. He previously founded online fashion retail store Sabunta, which then merged with another company to form Jumia.
Summit Partners also believes in the potential of the African e-commerce market. The firm led this round through its German holding company to fuel Jumia’s growth. In October, Summit Partners also led a $26 million round in Zando, the ‘South African Zappos.’
Rocket Internet and Summit Partners aren’t the only ones excited about Africa’s potential. Google has teamed up with African accelerator 88mph, and other incubator and accelerator programs are cropping up as well. Again, most of the efforts and activity are focused on South Africa, but if Jumia’s growth signals anything, it is that the rest of the continent wants a piece of the action as well.
