AXIAN Telecom, a pan-African telecommunications provider with operations in nine countries, has acquired an 8% minority stake in Jumia. The investment signals a strong alignment between the two companies and an interest in bolstering the continent’s digital retail infrastructure.
In a statement announcing the acquisition, Hassan Jaber, CEO of AXIAN Telecom, expressed confidence in Jumia’s vision.
“We believe JUMIA’s achievements in digital retail infrastructure and fintech through JumiaPay, as well as its logistics strengths, place it in a position to promote financial and economic inclusion for the communities which it serves. This unique position makes JUMIA a very attractive investment for AXIAN Telecom and one which is aligned with our core values.”
Jumia has long been regarded as a pioneer of eCommerce in Africa, but the company has been facing mounting challenges, most notably in its financial performance. Baillie Gifford, once its largest institutional investor, recently sold off its shares in the company, just as the firm announced declining revenues for Q1 of the year.
The drop in revenues is indicative of ongoing challenges Jumia faces in achieving profitability. After Francis Dufay took over as CEO, the company has shifted its focus from aggressive customer acquisition to cost-cutting measures, including slashing marketing spend and focusing more on customer retention.
While this has helped reduce costs, it has also had an adverse impact on Jumia’s revenue generation. The entrance of well-funded global competitors such as Temu and Shein into key African markets has only intensified these challenges.
To counter this, Jumia has been recalibrating its strategy and building relationships with Chinese suppliers. Meanwhile, it has also exited unprofitable markets and scaled back on certain product offerings.
Despite the current hurdles, Jumia remains hopeful about its future, with leadership insisting that it is only a matter of time before the company begins to see positive results. The new investment from AXIAN Telecom may provide the boost Jumia needs, helping to solidify its position as a leading player in the African eCommerce and fintech space.
