Jumia, on March 29, announced that Mastercard has agreed, to become an investor and form a strategic partnership, subject to certain conditions, to grow e-commerce operations and support the digital transformation of the continent.
The agreement comes shortly after Jumia landed in New York and announced its listing price on the New York Stock Exchange at a value of 1.1 billion US dollars confirming its status as the first African tech “unicorn” to enter the public market.
Jumia will list on the exchange raising a hefty 250-million US dollars on listing, with the new investor Mastercard, subscribing for 55-million dollars of that amount.
Currently, e-commerce is nascent in Africa and it accounts for less than 1 percent of total retail volumes. However, there are over 400 million internet users across the continent – amongst the largest in the world – which highlights the vast potential for growth.
Under the new agreement, the two companies will look to build on Mastercard’s presence across Africa, bringing its deep knowledge and expertise in payment solutions and technologies to spark new innovations and spur development in new customer segments.
As part of the deal, the companies have also agreed to build on their current efforts to accelerate the adoption of electronic payment platforms among consumers and merchants.
According to Sacha Poignonnec, co-CEO of Jumia, the strengthening of the relationship between the two entities will further 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,” he added.
Jumia and Mastercard first partnered in 2016 with the successful launch of Mastercard Payment Gateway Solutions in several markets.
That same year, Mastercard supported Jumia in the launch of JumiaPay, the payment service of the Jumia platform that facilitates transactions for consumers and sellers.
Sami Louali, Executive Vice President for Corporate Development and Financial Services, Jumia, said that as a global expert in digital payments with local expertise, Mastercard will provide its unparalleled capabilities to help create further awareness about Africa’s booming e-commerce sector, and allow Jumia to make its services more secure, seamless and reliable for customers.”
“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.
The partnership with Jumia underpins Mastercard’s commitment to transforming Africa’s digital payments landscape.
“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,” concluded Elcin Yanik, Executive Vice President, Market Development, Middle East and Africa at Mastercard.