I recently read an interesting article on CNBC, titled “No bank would fund this African mobile start-up — and then its founder became a billionaire”. It was about Sudan-born and Egypt-raised billionaire Mo Ibrahim. He is a phenomenal businessman and a world-renowned philanthropic.
Back in 1998, he founded African mobile network Celtel. However, no financial institution would fund it if he did not surrender all of his assets as security.
The piece noted that the perception of Africa as a corrupted continent hindered his quest for financial support. Surprisingly, he went on to grow the company and sold it for $3.4 billion in 2005.
Fast-forward to 2019, Jumia, a fast-growing eCommerce startup that has been a center of controversy got listed on the New York Stock Exchange. There has been an ongoing conversation if the startup is fully African as its HQ is in Germany, with a data center in Portugal. It also notes that most of its management team is foreign, from the CEO to senior management. Interestingly, Jumia has been able to raise a lot of capital, compared to its counterpart African startups.
However, Jumia is not the only the “African” startup with a similar operational and management structure. A LinkedIn connection recently put up an infographic in light of the recent Jumia success, and shockingly, companies like Tala, Moringa and Branch have the same approach to management; based at some plush location abroad, with a massive African market.
With Jumia marketing itself as an African startup simply because it was founded in Nigeria – which is not substantial enough – I do not feel like it reflects the accurate situation. I just feel that anyone who has a fantastic business idea, a student at a tech faculty in San Francisco or London gets to implement the idea in Africa and gets it to be successful by finding funding from abroad. I feel that it is much easier to secure funding if you come from a country in Europe or the US, and if your board of directors has Fortune 500 executives.
To me, speaking from a clarity point of view, Jumia should be very open with its structure and from an empathetic perspective; it should try win the hearts of its customers while caring about how they feel…especially if they found out that the company they trust is not honest. Jumia is an industry leader and it should exercise these traits. Africans are knowledgeable, especially in this 21st century economy so there’s no need to lie.