Why Jumia chose to list on the NYSE

Jumia Kenya Managing Director Sam Chapatte shed light on why the e-commerce platform opted to list on the New York Stock Exchange (NYSE).

Branded as a pan-African e-commerce firm, the company went public with an IPO on April 12 at the NYSE.

Dubbed the Amazon of Africa, the parent company  of Jumia Technologies elected to list in New York because of investor understanding over their business model.

“We decided to go through New York because that is where the best understanding of the investor side is about our business model,” he said. “That’s why you see many other global tech companies list in New York as well.”

The Jumia Kenya MD added listing on the NYSE was also geared at affording investors a good return on investment.

“What’s important is that investors understand the business model so that we can raise funding so that we can continue to invest in Kenya and across the rest of the continent,” Chappatte said.

Jumia, which went public on Friday, listed at a share price of USD14.50 (around Ksh1,464.50). Its IPO saw 13.5 million depository receipts offered, amounting to 17.6% of its shares offered.

After a day of listing, its stock had soared 75%, according to Bloomberg.

[Read: How office furniture affects work productivity]

Last year, Jumia made a pre-tax loss of Ksh14 billion, rising from the previous year’s Ksh12.5 billion.

Its losses were attributed to increased investment in its businesses, with the e-commerce firm saying sales were up despite the deficiency.

Chappatte added that the NYSE listing would build customer confidence in online commerce.

“There are still far too many Kenyans who havent’ yet tried online shopping — so we hope this will encourage them to get started,”

The IPO, according to Chappatte, could raise as much as USD100 million (around Ksh10 billion) in funding.

Based in 14 countries in Africa, the firm which was founded in 2012 is not looking to expand to other countries as at the moment although it is “always looking for new opportunities.”

Chappatte added that the listing would pay off in the medium term and long term, using an example of Amazon which he said went public at a “lower price” but which made gains over a period of around 20 years.

Amazon, which is listed on the NASDAQ, has a share price of around USD1,853 (Ksh187,000).

[See Also: Tell-EM PR names Joel Chacha as General Manager]