UPS teams up with Jumia for Africa expansion
Initial activation covers Kenya, Morocco and Nigeria with plans to expand to Ghana and Ivory Coast
UPS has signed a deal with digital marketplace company Jumia to grow its footprint in Africa. The deal gets UPS access to Jumia's last mile logistics capabilities and infrastructure to grow its delivery services in Africa as well as drop-off and pick-up locations and supports small business owners with cross-border logistics, visibility and payment solutions.
The initial activation covers Kenya, Morocco and Nigeria with plans to expand to Ghana and Ivory Coast, and the remaining African countries where Jumia operates.
"This partnership will help small and medium-sized businesses in Africa that make up 90 percent of all businesses on the continent and are the backbone of the economy," says Gregory Goba Ble, Vice President of Engineering and Operations for Indian subcontinent, Middle East and Africa, UPS. "UPS's asset-light approach, like the Jumia partnership, offers a pathway for businesses to quickly connect to new customers around the world through our global network, accelerating their revenue growth."
There were 281 million digital buyers in Africa in 2020, and it is estimated to increase to 520 million by 2025, according to Statista.
NYSE-listed Jumia's marketplace is supported by its proprietary logistics business Jumia Logistics, and its digital payment and fintech platform JumiaPay.
Jumia reported a 12 percent increase in 2021 revenue to $178 million and a 41 percent increase in operating loss to $241 million. It had 8 million active annual active consumers at the end of 2021 with 34 million orders and GMV of $990 million.
"At December 31, 2021, we had a liquidity position of $512.8 million comprising $117.1 million of cash and cash equivalents and $395.7 million of Term deposits and other financial assets. Cash used in operating and investing activities reached $66.6 million. Cash utilisation was supported by a positive working capital effect of $4.1 million as a result of an increase in payables relating to the uptick in first party activity as well as a shorter receivables cycle."
For the full year 2022, Jumia is expecting an adjusted EBITDA loss of $200 million to $220 million.
The UPS deal saw Jumia close with a gain of nearly 25 percent yesterday at $11.82 with a volume of nearly 25 million. The rally saw Jumia touch a market cap of over $1.1 billion.