Zinox to take over Jumia

By Sharon O. Isaalah

There are indications that Nigerian billionaire and Chairman of Zinox Group, Leo Stan Ekeh, might be planning a takeover bid for Jumia.

Ekeh, a former disc jockey, plans to use Zinox as the vehicle in ramping up shares in Jumia indirectly for a possible acquisition.

In 2001, the serial digital entrepreneur was not content with just distributing in Nigeria, systems that were manufactured in other countries, an idea that led him to the founding of Zinox computers. Zinox manufactures the first truly Nigerian-made Personal Computers, Laptops, Servers and UPSes.

Ekeh is credited with pioneering e-commerce in Africa with his now-defunct BuyRight Africa over 12 years ago, and he is replicating the same strategy that he deployed successfully in acquiring Yes Mobile, a cosmopolitan high-value retail outfit, Ashour Corporation, a foremost telecommunications services provider headquartered in Dubai, UAE and more recently, Konga to acquire Jumia.

Ekeh acquired Konga, another latter-day e-commerce pioneer, at a dying stage in 2018 and turned it around to the point of profitability in barely three years, becoming the first e-commerce brand to achieve this feat which industry experts have termed a miracle.

Sources claim Ekeh is supporting Konga’s massive investment in technology, logistics with a recent investment of over N4b and other infrastructure, including acquiring the single largest warehouse in Lagos, Port Harcourt, Abuja and Onitsha not too long ago, with the brand also attracting concrete interest from a horde of potential investors.

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On the other hand, Jumia remains the largest ecommerce platform in Africa, despite its financial troubles.

Last year, the company reported a loss of $227 million. This is one in a series of losses over the years. These losses, coupled with the declining share price, a drop in valuation to $477 million and a further drop in net equity to $413 million, raise insolvency concerns.

Jumia appears to be battling severe headwinds after its share price – which once traded at record highs of $59.96 tumbling down and currently trading at less than $5 – prompting speculations of a loss of investor confidence and a surprise takeover by Sub-Saharan Africa’s leading tech conglomerate, the Zinox Group.

In April 2019, Jumia had listed on the New York Stock Exchange (NYSE) with an eye-catching IPO which witnessed share prices opening at $14.5 and rising as high as $26. However, two weeks after, a damning report by Citron Research had accused Jumia of fraud, describing its stock as worthless. Specifically, the report had highlighted discrepancies in financials between investor presentations and SEC filings by Jumia, accusing its management of fraudulently inflating order numbers, while also labelling it a company burdened with inefficiencies.

Although Jumia denied any wrongdoing, the allegations from Andrew Left, founder of Citroen Research, resulted in a class-action lawsuit which Jumia recently settled out of court for $5m.

However, the debacle appeared to have seen investor confidence in Jumia take a huge bashing, with the likes of Rocket Internet and MTN Group, among others, exiting. Several reports and articles in local and international media also detailed how the company which prided itself as the continent’s first unicorn fell from grace and how Jumia’s misadventure had tainted the potential of African e-commerce.

Ekeh, a restless but very passionate e-Commerce enthusiast, is rumoured by sources to be keen on consolidating the e-Commerce brand with a presence in 15 African countries under Konga to actualize his great but very silent ambition to alter the destiny of Africans.

Zinox Group’s Head of Corporate Communications, Gideon Ayogu, neither officially confirmed nor denied the speculation. He did, however, say that “nothing positive is impossible”.

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