Baillie Gifford, a major institutional investor, has recently made headlines for selling its entire stake in Jumia, an African e-commerce company. This move marks a significant shift in ownership, as Baillie Gifford had previously held a 7.4% stake in Jumia in November 2024, which has now been reduced to 0% by May 2025. The decision to divest from Jumia comes as the company’s stock price has experienced a sharp decline, dropping from over $26 at its IPO in 2019 to around $2.5 at the time of sale. This likely resulted in substantial losses for Baillie Gifford.
The announcement of Baillie Gifford’s complete divestment was made through a filing with the U.S. Securities and Exchange Commission in May 2025. The firm had been gradually reducing its holdings in Jumia, starting at 9.2% in January 2024, before reaching 7.4% in November 2024, and ultimately selling off its remaining shares by May 2025. This move reflects the challenges facing Jumia in a highly competitive e-commerce landscape, where global giants like Temu and Shein are expanding their presence in key African markets.
Jumia’s Q1 2025 financial report revealed a 26% decline in revenue year-on-year, totaling $36.3 million. Despite the revenue drop, the company managed to reduce its net loss to $16.7 million, down from $40.7 million in the previous year. Jumia remains focused on achieving profitability by 2027, implementing cost-cutting measures such as reducing marketing expenses and exiting unprofitable markets like South Africa and Tunisia. The company is also prioritizing cost-effective channels like SEO and local radio to drive sales.
In response to the growing competition from global e-commerce players, Jumia is intensifying its efforts to attract international sellers, particularly from China. By expanding its base of Chinese vendors on the platform, Jumia aims to offer a wider range of products at competitive prices. Francis Dufay, Jumia’s CEO, highlighted the rapid growth of their Chinese vendor base and the strengthened supply pipeline during a recent investor call.
However, the exit of Baillie Gifford as a major investor raises concerns about Jumia’s ability to attract future institutional support. As the company navigates a challenging path towards profitability amidst fierce competition, the loss of a key investor like Baillie Gifford may impact its credibility and ability to secure additional funding. Jumia will need to continue adapting its strategies and strengthening its competitive position to thrive in the evolving e-commerce landscape.
