Jumia, a leading e-commerce platform in Africa has completed its previously announced “at-the-market” (ATM) offering of 20,227,736 American Depositary Shares (ADSs).
Recall that on August 6, 2024, Jumia filed a prospectus supplement with the U.S. Securities and Exchange Commission (SEC), for the sale of the ADS through the ATM offering, with RBC Capital Markets, LLC, and Berenberg Capital Markets LLC acting as the company’s agents.
The ATM offering is reported to have generated aggregate gross proceeds of $99.6 million before commissions and offering expenses. Jumia plans to utilize these funds for general corporate purposes, including customer acquisition, expanding its supplier base, scaling its logistics network, and enhancing marketing and vendor technology.
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The company’s CEO Francis Dufay expressed satisfaction with the outcome, stating that the funds will be used to accelerate Jumia’s growth trajectory.
In his words,
“We are pleased to announce the successful completion of this equity offering. Raising $99.6 million in gross proceeds provides Jumia with additional capital to further strengthen our balance sheet and help us accelerate our growth trajectory as we progress along our path to profitability.”
As of its Q2 2024 financial report, Jumia’s cash position stood at $92.8 million, which includes $45.1 million in cash and cash equivalents and $47.7 million in term deposits and other financial assets. This marked a decrease from the company’s liquidity position of $120.6 million in Q4 2023 and $101.5 million in Q1 2024. Jumia concluded the second quarter of 2024 with 2 million active quarterly customers, reflecting a 6.0% increase from Q1 2024. However, the year-over-year growth between Q2 2023 and Q2 2024 remained flat.
Operating loss was $20.2 million, down by 8% year-over-year or down 5% year-over-year on a constant currency basis, primarily reflecting the impact of cost reductions in the quarter. Loss before income tax from continuing operations was $22.5 million, down 27% year-over-year, driven by cost savings initiatives in the quarter and a decrease in finance costs mostly driven by a decrease in net foreign exchange losses compared to the second quarter of 2023.
The finance costs for the second quarter of 2024 was mainly influenced by losses recognized on the sale of financial assets. These assets, consisting of investments in securities measured at fair value, only impacted the company’s income statement upon disposal. The shift in the nature of finance costs between the two quarters highlights the varying financial factors affecting its performance.
Loss before income tax from continuing operations, which excludes the impact of foreign exchange recorded in finance income and finance costs, was up 1% in constant currency. The continued improvement in Jumia’s cash management illustrates its ongoing efforts to effectively preserve its cash resources as it executes its growth strategy. As of the second quarter of 2024, 67% of the company’s liquidity position was held in USD, as it continues to refine its cash repatriation.
Jumia remains committed to reducing its losses and accelerating its progress toward cash efficiency and profitable growth. Despite this growth, Jumia acknowledges that its customer base is still relatively small in comparison to the vast market potential, with the company operating in regions that collectively represent over 600 million people.