Today Rocket Internet, the e-commerce startup incubator started by the Samwer Brothers, announced that Jumia.com, an Amazon clone launched last year in Africa, has received another $26 million equity investment; this time from Summit Partners. Jumia is operationally active in Nigeria, Egypt and Morocco, and the company says that it will be using the new funds to expand to more countries in the region, as well as grow its business in current markets.
This new investment follows on from previous investments by Millicom and JP Morgan Asset Management last year.
For Summit, the investment represents one more link to the Samwers’ global operation, specifically in efforts aimed at building out e-commerce businesses in emerging markets. Most recently, in December Summit invested $26 million in Asian Amazon clone Lazada; and it also has worked with Rocket Internet companies in Africa specifically, investing €20 million in Zando, an online fashion portal. Other Summit Rocket investments have included $50 million in decor site Westwing and stakes in Dafiti, Jabong, Lamoda and Zalando.
“We seek to invest in companies around the world that build long-term value,” said Scott Collins, MD and head of the Summit Partners London office, in a statement. “Jumia has established itself as a fast-growing company early on, and we are pleased to partner with its management team.”
According to TechCrunch, “As with other efforts in emerging markets in Latin America, Asia and Eastern Europe, Africa represents a two-fold opportunity for Rocket Internet.”
“For starters, these are the markets where internet usage is growing the fastest, and where consumers are most new, and possibly most receptive, to the opportunities presented by e-commerce. In some markets like Brazil and Russia, for example, you could argue that the growth in internet usage underscores the rise of a new middle class of users who have the income and the acumen to look to the internet for the best deals. That means that the market is less crowded and more ripe for the taking for those companies investing big in their e-commerce businesses.”
“Second, because these are markets that have largely been untapped by bigger players like Amazon, eBay and Japan’s Rakuten, it could potentially represent a key exit opportunity for Rocket, should those giants want to move into these markets and choose the inorganic, acquisition route to do so. That’s certainly been a good strategy for the Samwer brothers in the past, again and again.”
“We are excited to be joined by Summit Partners, a new investor that shares our aspirations for Africa’s e-commerce,” Jumia Africa Global co-CEOs Jeremy Hodara and Sacha Poignonnec said in a statement. “This investment, which comes on the heels of a previous investment in Jumia by Millicom and JP Morgan Asset Management, allows us to offer new categories of products, strengthen our operations, deliver to our customers even faster, and recruit the best talent.”
