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African e-commerce startup Jumia files for IPO on NYSE
Pan-African e-commerce company Jumia filed for an IPO on the New York Stock Exchange today, per SEC documents and confirmation from CEO Sacha Poignonnec to TechCrunch.
The valuation, share price and timeline for public stock sales will be determined over the coming weeks for the Nigeria-headquartered company.
With a smooth filing process, Jumia will become the first African tech startup to list on a major global exchange.
Poignonnec would not pinpoint a date for the actual IPO, but noted the minimum SEC timeline for beginning sales activities (such as road shows) is 15 days after submitting first documents. Lead adviser on the listing is Morgan Stanley .
There have been numerous press reports on an anticipated Jumia IPO, but none of them confirmed by Jumia execs or an actual SEC, S-1 filing until today.
Jumia’s move to go public comes as several notable consumer digital sales startups have faltered in Nigeria — Africa’s most populous nation, largest economy and unofficial bellwether for e-commerce startup development on the continent. Konga.com, an early Jumia competitor in the race to wire African online retail, was sold in a distressed acquisition in 2018.
With the imminent IPO capital, Jumia will double down on its current strategy and regional focus.
“You’ll see in the prospectus that last year Jumia had 4 million consumers in countries that cover the vast majority of Africa. We’re really focused on growing our existing business, leadership position, number of sellers and consumer adoption in those markets,” Poignonnec said.
The pending IPO creates another milestone for Jumia. The venture became the first African startup unicorn in 2016, achieving a $1 billion valuation after a $326 funding round that included Goldman Sachs, AXA and MTN.
Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries, spanning Ghana, Kenya, Ivory Coast, Morocco and Egypt. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.
Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape.
Jumia has also opened itself up to traders and SMEs by allowing local merchants to harness Jumia to sell online. “There are over 81,000 active sellers on our platform. There’s a dedicated sellers page where they can sign-up and have access to our payment and delivery network, data, and analytic services,” Jumia Nigeria CEO Juliet Anammah told TechCrunch.
The most popular goods on Jumia’s shopping mall site include smartphones (priced in the $80 to $100 range), washing machines, fashion items, women’s hair care products and 32-inch TVs, according to Anammah.
E-commerce ventures, particularly in Nigeria, have captured the attention of VC investors looking to tap into Africa’s growing consumer markets. McKinsey & Company projects consumer spending on the continent to reach $2.1 trillion by 2025, with African e-commerce accounting for up to 10 percent of retail sales.
Jumia has not yet turned a profit, but a snapshot of the company’s performance from shareholder Rocket Internet’s latest annual report shows an improving revenue profile. The company generated €93.8 million in revenues in 2017, up 11 percent from 2016, though its losses widened (with a negative EBITDA of €120 million). Rocket Internet is set to release full 2018 results (with updated Jumia figures) April 4, 2019.
Jumia’s move to list on the NYSE comes during an up and down period for B2C digital commerce in Nigeria. The distressed acquisition of Konga.com, backed by roughly $100 million in VC, created losses for investors, such as South African media, internet and investment company Naspers .
In late 2018, Nigerian online sales platform DealDey shut down. And TechCrunch reported this week that consumer-focused venture Gloo.ng has dropped B2C e-commerce altogether to pivot to e-procurement. The CEO cited better unit economics from B2B sales.
As demonstrated in other global startup markets, consumer-focused online retail can be a game of capital attrition to outpace competitors and reach critical mass before turning a profit. With its unicorn status and pending windfall from an NYSE listing, Jumia could be better positioned than any venture to win on e-commerce at scale in Africa.
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5 unicorns that will probably go public in 2019 (besides Uber and Lyft)
There’s been plenty of fanfare surrounding Uber and Lyft’s initial public offerings — slated for early 2019 — since the two companies filed confidential IPO paperwork with the U.S. Securities and Exchange Commission in early December. On top of that, public and private investors have had plenty to say about Slack and Pinterest’s rumored 2019 IPOs but those aren’t the only “unicorn” exits we should expect to witness in the year ahead.
Using its proprietary company rating algorithm, data provider CB Insights ranked five billion dollar companies most likely to perform IPOs next year in its latest tech IPO report. The algorithm analyzes non-traditional public signals, including hiring activity, web traffic and mobile app data to make its predictions. These are the startups that topped their list.
Peloton
Peloton Co-Founder and CEO John Foley speaks onstage during TechCrunch Disrupt SF 2018 on September 6, 2018 in San Francisco, California. (Photo by Kimberly White/Getty Images for TechCrunch).
Peloton, dubbed the “Netflix of fitness,” has raised nearly $1 billion in venture capital funding in the six years since it was founded by John Foley, most recently raising $550 million at a $4 billion valuation. The manufacturer of tech-enabled exercise equipment is more than doubling in size every year and is “weirdly profitable,” an unusual characteristic for a venture-backed business of its age. Headquartered in New York, Peloton doesn’t have any public IPO plans, though Foley recently told The Wall Street Journal that 2019 “makes a lot of sense” for its stock market debut.
Select investors: L Catterton, True Ventures, Tiger Global
Cloudflare
Cloudflare co-founder and CEO Matthew Prince appears on stage at the 2014 TechCrunch Disrupt Europe/London. (Photo by Anthony Harvey/Getty Images for TechCrunch)
Cybersecurity unicorn Cloudflare is likely to transition to the public markets in the first half of 2019 in what is poised to be a strong year for IPOs in the security industry. The web performance and security platform is said to be preparing for an IPO at a potential valuation of more than $3.5 billion after last raising capital in 2015 at a $1.8 billion valuation. Since it was founded in 2009, the San Francisco-based company has raised just north of $250 million in VC funding. CrowdStrike, another security unicorn, is also on track to go public next year and it wouldn’t be surprising to see Illumio and Lookout make the jump to the public markets as well.
Select investors: Pelion Venture Partners, NEA, Venrock
Zoom
San Jose-based Zoom Video Communications has reportedly tapped Morgan Stanley to lead its upcoming IPO.
Zoom, a provider of video conferencing services, online meeting and group messaging tools that’s raised $160 million in VC cash to date, is eyeing a multi-billion IPO in 2019 and has reportedly hired Morgan Stanley to lead the offering. Founded in 2011, the company most recently brought in a $100 million Series D financing, entirely funded by Sequoia, at a $1 billion valuation in early 2017. Based in San Jose, Zoom is hoping to garner a valuation significantly larger than $1 billion when it IPOs, according to Reuters.
Select investors: Sequoia, Emergence Capital Partners, Horizons Ventures
Rubrik
Data management company Rubrik co-founder and CEO Bipul Sinha.
Data management company Rubrik has quietly made moves indicative of an impending IPO. The startup, which provides data backup and recovery services for businesses across cloud and on-premises environments, hired former Atlassian chief financial officer Murray Demo as its CFO earlier this year, as well as its first chief legal officer, Peter McGoff. Palo Alto-based Rubrik was valued at over of $1 billion with a $180 million funding round in 2017. The company has raised nearly $300 million to date.
Select investors: Lightspeed Venture Partners, Greylock, Khosla Ventures
Medallia
Medallia, a customer experience management platform that’s nearly two decades old, may finally become a public company in 2019. The San Mateo-based company, which has been rumored to be planning an IPO for several years, hired a new CEO this year and reported $250 million in GAAP revenue for the year ending Jan. 31, 2018, according to Forbes. Medallia hasn’t raised capital since 2015, when it secured a $150 million funding deal at a $1.2 billion valuation. It has raised a total of just over $250 million.
Select investor: Sequoia
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AtScale lands $50 million investment led by Morgan Stanley
AtScale, the startup that helps companies move massive amounts of data into business intelligence and analytics tools, announced a $50 million Series D round today.
Morgan Stanley led the round, with previous investors Storm Ventures and Atlantic Bridge joining in. New investor Wells Fargo also participated. The funding comes almost exactly a year after the company announced its $25 million Series C. Today’s funding brings the total amount raised to $120 million.
Bringing on an institutional investor like Morgan Stanley is often a signal that the company has reached the stage where it is at least beginning to think about the possibility of going public at some point in the future. AtScale CEO Chris Lynch acknowledged such a connection without making any broad commitment (as you would expect). “We are not close to being IPO-ready, but that was a future consideration in selecting Morgan Stanley,” Lynch told TechCrunch.
What the company does is help take big data and move it into tools where customers can make better use of it. AtScale co-founder Dave Mariani used to be at Yahoo where he helped pioneer the use of big data in the 2009/2010 timeframe. Unfortunately, systems at the time couldn’t deal with the volume of data — and that is still a problem, one that AtScale says it is designed to solve. “We take a bunch of data silos and put a semantic layer across the data platforms and expose them in a consistent way,” Mariani told TechCrunch last year at the time of the Series C round. This allows a company to get a big picture view of their data, rather than consuming it in smaller chunks.
AtScale reported a banner year, bringing on 50 new customers across their target verticals of retail, financial services, advertising and digital sales. These include Rakuten, Dell Technologies, TD Bank and Toyota. What’s more, the company stretched out this year, taking advantage of the last funding round to expand more into international markets in Europe and Asia.
The company was founded in 2013 and is based in San Mateo, California.
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Our 3 favorite startups from Morgan Stanley’s 2nd Multicultural Innovation Lab Demo Day
The Morgan Stanley Multicultural Innovation Lab, Morgan Stanley’s in-house accelerator focused on companies founded by multicultural and female entrepreneurs, hosted its second Annual Showcase and Demo Day. The event also featured companies from accelerators HearstLab, Newark Venture Partner Labs and PS27 Ventures. (Note: I was formerly employed by Morgan Stanley and have no financial ties.)
The showcase represented the culmination of the program’s second year, which followed an initial five company class that has already seen two acquisitions. Through the six-month program, Morgan Stanley provides early-stage companies with a wide range of benefits including an equity investment from Morgan Stanley, office space at Morgan Stanley headquarters, access to Morgan Stanley’s extensive network, and others. Applications are now open for its third cohort of companies with the application window closing on January 4th, 2019.
The 16 presenting startups, all led by a female or multicultural founder, offered solutions to structural inefficiencies across a wide array of categories including fintech, developer tools, and health. Though all of the companies offered impressive presentations and strong value propositions, here are three of the companies that stood out to us.
Hatch Apps
In hopes of democratizing software and app development, Hatch Apps provides a platform that allows users and companies to build iOS, Android and web applications without any code through pre-built templates and custom plug-and-play functions. In essence, Hatch Apps provides a solution for application building similar to what Squarespace or Wix provide for websites.
In the modern economy, every company is in one way or another a tech or tech-enabled company. Now the demand for strong engineers has made the fight for talent increasingly competitive and has made engineering quite costly, even when only needed for simple tasks.
For an implementation and subscription fee, Hatch Apps allows companies with less sophisticated engineering DNA to reduce entering costs by launch native apps on their own, across platforms, and often on faster timelines than those seen through third-party developers. Once an app is launched, Hatch Apps provides customers with detailed analytics and allows them to send targeted push notifications, export data and make in-app changes that can automatically go live in app stores.
The company initially took a bootstrapping approach to financing and raised funds by selling a 2016 election-themed “Cards Against Humanity”-style game created on the platform. Since then, Hatch Apps has already received funding from the Y Combinator Fellowship, Morgan Stanley, and a number of other investors.
FreeWill
While estate planning is a topic many don’t like to think about, it’s a critical issue for managing cross-generational wealth. But will drafting can often be very complex, time-consuming, and costly, requiring hours of legal consultation and coordination between various parties.
Founded by two former classmates at Stanford Business School, FreeWill looks to simplify the estate planning process by providing a free online platform that automates will drafting, in a similar function to what TurboTax does for taxes. Using FreeWill, users can quickly set allocations for their estate and select personal recipients, charitable donations, executor specifications, and other ancillary requests. The platform then creates a finalized legal document that is legally valid in all 50 states, which users can also quickly make changes to and replace without incurring expensive legal costs.
FreeWill is able to provide the platform to consumers for free due to the proceeds it receives from its non-profit customers, who pay to be featured on the platform as a partner organization. FreeWill offers a compelling value proposition for partnering companies. By acting as a channel to funnel user donations to listed organizations, FreeWill has been able to drive a 600% increase in charitable giving to partner organizations on average. FreeWill also provides partner organizations with backing analytics that allow non-profits to track bequests and donors through monthly reports.
FreeWill currently boasts an impressive roster of 75 paying non-profit partners that include American Red Cross, Amnesty International and many others. In the long-run hopes to be the go-to solution financial and legal end of life planning for investment advisors, life insurance and employee benefits providers.
Shoobs
Shoobs is looking to be the go-to platform for local “urban” events, which the company defined as events centered on local nightlife, comedy and concerts in the hip-hop, R&B, and reggae genres to name a few. But unlike the genre-agnostic, transaction-focused event management platforms that can make the space seem pretty crowded, Shoobs focused on providing genre-specific even discovery. Shoobs matches urban event goers with artists of their choice and related smaller scale events that can be harder to discover, acting as a form of curation, quality control and discovery.
For event organizers, Shoobs helps provide digital ticketing and promotion services, with event recommendation capabilities that target the most promising potential customers. Through its offering to event organizers, Shoobs is able to monetize its services through ticket sale commission, advertising and brand partnerships.
Since its initial launch in London, Shoobs notes it has become one of the top urban events platforms in the city, with an extensive base of recurring registered users and event organizers. After previously working with AEG for its London launch, Shoobs is looking to expand stateside with the help of organizers like Live Nation. Shoobs joins a long list of promising Y Combinator alumni companies with YC also acting as one of Shows initial investors
Other presenting companies included:
Morgan Stanley Multicultural Innovation Lab
- BeautyLynk “is an on-demand hair and makeup service provider, specializing in customizable services for women.”
- Broadway Roulette “is an events marketplace that pairs consumers with surprise cultural events, beginning with Broadway theater.”
- CariClub “is an enterprise software platform to connect young professionals with nonprofit opportunities.”
- COI Energy Services “is an integrated platform for electric utilities and business users to optimize and manage energy usage.”
- CoSign “is an API and application that allows anyone to create, distribute and monetize visual content.”
- Goalsetter “is a goals-based gifting, savings, and investing platform designed for children.”
- myLAB Box “offers customizable at home health-test kits and relevant telemedicine consultations / prescription services.”
Hearst Labs
- Priori “is a global legal marketplace changing the way in-house teams find, hire, and manage outside counsel.”
- TRENCH “is an online fashion marketplace that makes use of the unworn items in every woman’s closet.”
Newark Venture Partners Labs
- Floss Bar “is a new type of preventive brand for oral health care. The company offers high-quality, routine dental care across flexible locations at thoughtful prices.”
- Upsider “is a software solution allowing recruiters to leverage AI technology to identify a comprehensive set of candidates who align with their business and role requirements, resulting in a more strategic understanding of the best possible talent for the job.”
PS27 Ventures
- BlueWave Technologies “is a cleantech company and the creators of the BlueWave
Cleaning System — a water free, detergent free, and chemical free plasma device that cleans items that are extremely hard or impossible to clean with a washer and dryer.” - OnPay Solutions “focuses exclusively on business-to-business payments. They create payment software and offer payment web services to enhance efficiency and productivity for Accounts Payable and Accounts Receivable.”
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Instapage raises $15M to make landing pages smarter
Landing pages might not sound like the most exciting problem for a startup to tackle, but Tyson Quick, founder and CEO of Instapage, said that they’re a real issue for marketers.
Quick was previously working on a marketing product called Jounce, where he was frustrated by the fact that even after someone had clicked on a Jounce ad and ended up on the company’s website, only 3 percent of them were converting.
“It was kind of ridiculous, since they’d already engaged with the ad,” Quick said. So just by creating a few personalized landing pages that targeted “major” customer segments, Jounce was able to increase conversions to around 20 percent.
In 2012, Quick decided to switch the company’s focus to Instapage, and it now offers a broader platform for creating and testing different landing pages that are personalized for different visitors.
“We can be this middleware between ad tech and traditional marketing and sales tech,” Quick said. “All this technology has made it so the ad-buying side has sophisticated targeting and relevancy. And once you capture a lead, you’ve got marketing automation that pushes them into your CRM. It’s the point of conversion that’s missing.”
Instapage now has more than 15,000 customers who are seeing average conversion rates above 22 percent. And it’s announcing that it’s raised $15 million in Series A funding from Morgan Stanley Expansion Capital.
Quick admitted that it hasn’t just been a straight line to success. He recalled moving from Salt Lake City to San Francisco and living in his car for part of the month so that he could rent out his apartment on Airbnb.
“I didn’t want to get a job,” he explained — and the Airbnb money helped him devote his time to Instapage.
Quick also said it took some time to find the ideal customers, namely larger companies that are always running digital advertising campaigns. The strategy seems to have worked, with Instapage not losing a single enterprise customer in the past year.
Quick also sees a broader opportunity around what he calls “post-click conversion optimization,” which he said has three key components — scalable creation, optimization and personalization. (That last category is what his team is focused on building out now.) And while other companies like Optimizely might tackle some of those segments, he said Instapage is leading the way in combining all three.
I wondered whether GDPR or other shifts in the landscape around online data and privacy could affect Instapage’s business, but Quick argued that the company doesn’t need detailed user data to be helpful: “The personalization comes from the advertising itself. We can glean insights from what ads did they engage with.”
As for raising money, Instapage had already raised $2 million in seed funding. Quick said that when he started to have conversations about a Series A, most VCs weren’t interested in giving the company “the valuation we felt we deserved.” (He speculated that they were “a little preoccupied by the buzzy things that were going on” like cryptocurrency and on-demand delivery.) And the company was profitable, with what Quick said is $12 million in annual recurring revenue, so it didn’t need to raise the funding.
However, he found that Morgan Stanley was more willing to dig in and learn about Instapage’s business.
“Instapage has a clear vision for improving digital marketing efficiency and has built an impressive product for marketers to create more successful advertising campaigns without the need for external or technical resources,” said Pete Chung, the head of Morgan Stanley Expansion Capital, in the funding announcement. “We’re confident that this next phase of growth will further establish Instapage as the authority on converting ad clicks and optimizing conversions, and we look forward to working with Instapage to bring post-click optimization to a larger audience.”
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Levchin’s Affirm secures $100M credit line from Morgan Stanley
This morning, fintech startup Affirm announced a new $100 million credit line from Morgan Stanley. The money will go directly to supporting the company’s current financial products that help customers purchase goods and spread their expenses over a period of time. Morgan Stanley is not the first institutional lender to issue a line of credit to the company. In May of 2015, Affirm closed… Read More
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