CDC, the UK’s development finance institution, has today announced a EUR50m equity investment in Africa Internet Group (“AIG”). AIG is the parent company of Jumia, Africa’s leading e-commerce firm, as well as nine other online consumer businesses operating in 23 countries across the continent.
AIG currently connects more than 50,000 local and international companies with millions of African consumers. CDC’s capital will help AIG improve its existing operations and expand into new countries.
Welcoming the investment, Mark Pay, CDC’s Managing Director, Equity Investments said: “CDC’s investment in AIG means that we’re backing a business that is playing a leading role in Africa’s growing ecommerce market. The investment will help create thousands of jobs and allow many small businesses to access new markets previously closed to them.
“Smartphone-driven ecommerce will be one of the most important technological and economic trends in Africa in the next decade. More and more Africans can now access the internet, with half the population expected to be online by 2025. We’re pleased to be supporting a company that can be a financial success and make a big difference to the continent’s development.”
The companies in the group have a significant job-creation potential, particularly those businesses that involve the delivery of a physical products. Jumia Group already has over 4,000 employees and it is expected that Jumia Services (formerly AIG-Express), the logistics business within the group (and already one of Africa’s largest logistics firms, delivering over 4 million orders in 2015) will generate thousands of new delivery jobs by 2020.
In addition to direct employment, AIG operates a network of 30,000 sales agents, the “J-Force”. Currently largely Nigeria-based, the J-Force is expanding into other countries, with numbers of agents expected to grow to over 100,000 by the end of 2017.
Online marketplace businesses can also play an important role in providing access to new customers for local vendors. Kaymu, an online marketplace focused on smaller sellers, enables these vendors to develop their businesses by providing them with access to a nationwide market for the first time. Most sellers on the Kaymu platform are micro and small businesses – often people who had previously been market traders. Several thousand of these small firms actively trade on the platform every month and as they grow so do the number of jobs they provide.
Other services offered by Africa Internet Group include websites offering food delivery (Hellofood) and hotel booking (Jovago), as well as online classified ads for general merchandise (Vendito), real estate (Lamudi), jobs (EverJobs) and vehicles (Carmudi).
Welcoming CDC's investment, Sacha Poignonnec, Co-CEO of Jumia Group said: “We are very glad to be partnering with CDC. Their proven experience in investing in Africa and their expertise on long-term development will be decisive in building a healthy ecosystem around Jumia, developing and accompanying more and more African businesses and entrepreneurs in this shift towards mobile and online. Today, Jumia already reaches 50 million people every month and there is no doubt CDC will be a crucial partner in extending that reach over the next months and years.”
CDC is the UK government-owned development finance institution. CDC’s mission is to support the building of businesses throughout Africa and South Asia, to create jobs and making a lasting difference to people’s lives in some of the world’s poorest places.
We provide investment capital in all its forms, including equity, debt, mezzanine and guarantees, and this capital is typically used to fund growth. This capital is provided directly and through fund managers that are aligned with our aims.
CDC uses its own balance sheet to invest and has net assets of £3.4bn.