Tech investment company, Rocket Internet has made known that it has sold its stake in African eCommerce company Jumia.
Speaking to journalists, Bettina Curtze, head of finance and investments of Rocket internet said that the company which had held an 11% stake in Jumia as of November 8, sold its holding between then and the onset of the coronavirus crisis.
Although the company didn’t declare what it made from the sale, the proceeds are said to be a part of the 2.1 billion euros ($2.30 billion) of net cash the company had at the end of Q1 2020.
This exit is not unexpected, as it’s out of Rocket Internet’s playbook. Rocket Internet is known for pulling out of start-ups once they become solid – ‘building and selling’ online startups. This method, according to its CEO Oliver Samwer, is needed as the company plans to “hold on to its mountain of cash” to allow it access to opportunities and compete with rivals from US and China.
As such, when Jumia decided to list on the NYSE last year, it was widely perceived as a potential exit move for Rocket Internet from one of its largest investments. Since its listing last April however, Jumia has seen its shares steadily fall on Wall Street. The fall came soon after Citron Research, run by Andrew Left, questioned some of its sales figures.
Jumia reported that its Q4 2019’s loss before interest, taxation, depreciation, and amortization rose by 5% to 51.2 million euros, and said it had 232 million euros of cash as of the end of 2019.
Suggested Read: MTN Plans Significant Sale of its Jumia Stake as Citron Research Crashes Jumia Share Price
Rocket now only holds stakes in furniture site, Home24 and Global Fashion Group, which sells fashion online. It also has stakes in more than 200 private companies – which are valued at 1.1 billion euros.
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