Jumia, an African e-commerce start-up, has received $56 million from Mastercard Europe ahead of its unusual Initial Public Offering (IPO) on the New York Stock Exchange of the United States.
Mastercard Europe made the investment in a private trade for the exchange of Jumia‘s shares. However, Mastercard Europe will be offered the shares at a price determined by investors ahead of the floating of shares.
The deal between the two companies will create a partnership to grow e-commerce operations and support the digital transformation of the African continent. Mastercard will also offer its expertise in payment solutions and technologies to upgrade Jumia‘s payment system.
Mastercard and Jumia have a business relationship that dates back to 2016 when both companies partnered to launch Mastercard Payment Getaway Solutions in many markets. Jumia also received the support of Mastercard to launch JumiaPay, which facilitates transactions for consumers and sellers.
The Chief Executive Officer of Jumia, Sacha Poignonnec said the partnership will strengthen the objectives of both companies and cement Jumia‘s position as the e-commerce leader in Africa.
According to Poignonnec, “we are delighted to strengthen our existing partnership with Mastercard and consolidate Jumia’s position as the leading e-commerce platform in Africa. This investment highlights the strategic synergies between the two companies, as we both seek to develop the payments ecosystem and drive financial inclusion across Africa”.
The Executive Vice President of Mastercard (Middle East and Africa), Elcin Yanik, who also reacted to the development said, the investment shows the commitment of Mastercard in transforming Africa’s digital payments landscape.
Yanik revealed that “Mastercard has been rapidly expanding its presence and partnerships in Africa, bringing new technologies to the continent that help to enhance the consumer experience and enable greater access and inclusion. This partnership with Jumia underpins Mastercard’s commitment to transforming Africa’s digital payments landscape”.
He added that “in recent years, we have invested heavily in technology, people and local markets, and have seen tremendous growth in online payments in particular. We look forward to working with Jumia to enhance the region’s digital infrastructure and ecosystem”.
The retail market has been dominated by the brick and mortar businesses, with only a few people depending on e-commerce platforms to purchase goods. But with over 400 million internet users across Africa, industry experts like Sami Louali, the Executive Vice President for Corporate Development and Financial Services at Jumia, believe there’s growth opportunity.