New York Stock Exchange welcomes Africa’s first ‘unicorn’

Nigerian-based online retailer Jumia became the first African tech startup to be publicly traded on the New York Stock Exchange on April 12.

The company made headlines in 2013 for becoming Africa’s first ‘unicorn,’ tech-industry parlance for a startup valued at $1 billion or more.

Jumia is a digital marketplace active in 14 countries on the African continent. Its country-specific sites host products for 81,000 active merchants, selling everything from televisions to soap. Top-selling items in 2018 included smartphones and footwear.

The company has grown popular since launching in 2012 by delivering orders to hard-to-reach locations in sub-Saharan Africa — something the bigger players in e-commerce have yet to do.

The extra cost of forging ahead in a new market means that Jumia has yet to turn an annual profit, despite revenue growing by 39 percent in 2018. This is one reason why Jumia has joined the New York Stock Exchange.

Man holding a parcel while seated on a motorbike (© Jumia)
Jumia has devised an African approach to e-commerce. Most deliveries are made by motorbike. (© Jumia)

If you can make it there

When a company wants to go public, it cannot go bigger than the New York Stock Exchange. With a portfolio of 2,300 companies representing $27.3 trillion in market capital, the NYSE attracts 90% of foreign companies listed in the U.S. market with its size and diversity.

Alex Ibrahim, head of international capital markets at the NYSE, believes companies prefer the way stocks are traded on the NYSE floor: by actual people (called designated market makers) instead of computer-based algorithms.

Image of Jumia listed on the NYSE trading board (State Dept./ L. Rawls)
(State Dept./ L. Rawls)

“If you look at our execution compared to our competitors — the market quality is better, the volatility is lower, there’s more liquidity and depth. It’s very attractive for companies,” he said. Companies also get a kick out of ringing the NYSE opening and closing bells, privileges reserved for exchange members, he said. Jumia’s co-founders were invited to ring the exchange’s opening bell on April 12, in honor of their bringing Africa’s startup tech industry to the global marketplace.

“Jumia will serve as a proxy to invest in this part of the world, because we don’t have any other product similar to Jumia in the U.S. market,” Ibrahim said. “Now, even John and Mary in Oklahoma can trade in Jumia.”