Mastercard to join investors in online retailer Jumia

Jumia Technologies AG said Mastercard Inc has agreed to invest Sh5.6 billion (50 million euros or $56 million) in a private placement ahead of the Africa-focused online retailer’s planned initial public offering in New York.

The US credit-card giant joins shareholders such as French drinks maker, Pernod Ricard SA, which bought a 5.1 per cent stake for 75 million euros in December, and largest investors MTN Group Ltd and Rocket Internet SE.

The Pernod deal valued Jumia at about Sh158 billion (1.4 billion euros) making the Amazon.com Inc-like firm a rare African unicorn  - a private company valued at more than Sh100 billion ($1 billion).

It is selling 13.5 million American Depository Shares at Sh1,300 ($13) to Sh1,600 ($16) each, according to a filing last week, which could raise as much as Sh21.6 billion ($216 million). The e-commerce company Jumia had filed for a New York initial public offering, which could value the firm at Sh160 billion or more.

Founded by French entrepreneurs Sacha Poignonnec and Jeremy Hodara in 2012, the firm offers online shopping, logistics and payment services, but is losing money. The company says its business is expanding, and Africa’s development will make it a better market with a growing young population, more infrastructure investments, urbanisation and rapid economic growth.

The move by Mastercard increases the chances of a successful share sale for loss-making Jumia, which has customers across 14 African countries.

Mastercard also agreed to a new partnership to help Jumia grow its operations, Berlin-based Jumia said in an emailed statement on Monday.

The US credit-card giant “has been rapidly expanding its presence and partnerships in Africa,” Elcin Yanik, a marketing executive at the Purchase, New York-based company, said in the same statement.