Africa’s leading tech conglomerate, the Zinox Group, appears set for a surprise takeover of Jumia, one of the major e-commerce players in the African market.
Jumia is battling severe headwinds after its share price, which once traded at record highs of $59.96 tumbled down and currently trading at less than $5 with a consequent loss of investor confidence.
In April 2019, Jumia had listed on the New York Stock Exchange (NYSE) with an eye-catching IPO which witnessed share prices opening at $14.5 and rising as high as $26. However, two weeks after, a damning report by Citron Research had accused Jumia of fraud, describing its stock as worthless.
Specifically, the report had highlighted discrepancies in financials between investor presentations and SEC filings by Jumia, accusing its management of fraudulently inflating order numbers, while also labelling it a company burdened with inefficiencies.
Although Jumia denied any wrongdoing, the allegations from Andrew Left, founder of Citroen Research, resulted in a class-action lawsuit which Jumia recently settled out of court for $5m.
However, the debacle appeared to have seen investor confidence in Jumia take a huge bashing, with the likes of Rocket Internet and MTN Group, among others, exiting. Several reports and articles in local and international media also detailed how the company which prided itself as the continent’s first unicorn fell from grace and how Jumia’s misadventure had tainted the potential of African e-commerce.
Now, highly placed sources indicate that Chairman of the Zinox Group, Leo Stan Ekeh, is ramping up shares in Jumia indirectly for a possible acquisition.
The serial digital entrepreneur, who is credited with pioneering e-commerce in Africa with his now-defunct BuyRight Africa over 12 years ago, is replicating the same strategy which he deployed successfully in acquiring Yes Mobile, a cosmopolitan high-value retail outfit, Ashour Corporation, a foremost telecommunications services provider headquartered in Dubai, UAE and more recently, Konga.
Ekeh acquired Konga, another latter-day e-commerce pioneer, at a dying stage in 2018 and turned it around to the point of profitability in barely three years, becoming the first e-commerce brand to achieve this feat which industry experts have termed a miracle.
Ekeh is supporting Konga’s massive investment in technology, logistics with a recent investment of over N4b and other infrastructure, including acquiring the single largest warehouse in Lagos, Port Harcourt, Abuja and Onitsha not too long ago, with the brand also attracting concrete interest from a horde of potential investors.
According to persons knowledgeable with the matter, the Zinox Chairman, a very passionate e-Commerce enthusiast, is keen on consolidating the e-Commerce brand with a presence in 15 African countries under Konga to rework the Africa’s e-Commerce landscape.