- eCommerce giant Jumia has completed its at-the-market (ATM) offering of 20,227,736 American Depositary Shares (ADSs), generating aggregate gross proceeds of $99.6 million before commissions and offering expenses.
- The company plans to channel the proceeds towards general corporate purposes. It also intends to use the funds to support its customer acquisition efforts, expand its supplier base, scale its logistics network, and enhance its marketing and vendor technology.
Jumia successfully raised nearly $100 million through the 20 million American Depositary Shares (ADSs) sale, despite concerns over its declining stock price. Jumia Technologies AG ($JMIA) had seen its share price fall from a high of $13, which had previously boosted its market value to over $1.3 billion.
The eCommerce platform reported a revenue decline, generating $36.5 million in Q2 2024, 25% less than in Q1 2024 and 17% less than in the same quarter last year.
Besides, its gross merchandise value also fell in Q2, reaching $170.1 million compared to $181 million in Q1. Its gross profit saw a 6% decline to $21.6 million.
While part of its plans includes customer acquisition, Jumia had 2 million active quarterly customers in Q2 2024, a 6.0% increase compared to Q1 2024, remaining steady compared to Q2 2023 and Q2 2024.
In the same quarter, Jumia spent $4.4 million on sales and advertising and $8.7 million on technology and content. The company plans to use the proceeds to enhance its marketing efforts and vendor technology.
On completing the secondary shares offering, Jumia CEO Francis Dufay said, "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."
On August 6, 2024, Jumia filed with the Securities and Exchange Commission for the sale of 20,227,736 ADSs through an "at-the-market" offering.
This is not the first time Jumia has raised capital in this manner; the company previously secured nearly $600 million through the sale of secondary shares.
As of June 30, 2024, Jumia’s cash position was $92.8 million, down from $120.6 million in Q4 2023 and $101.5 million in Q1 2024.
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