Jumia Technologies (NYSE: JMIA), the self-styled 'Amazon of Africa,' has had a rough time since its IPO in April 2019. The Africa-focused e-commerce platform currently trades at a fraction of its earlier unicorn valuation as it continues to post massive losses. Even Jumia's management seems to be losing faith in the old business model -- retreating from non-core markets as part of a pivot toward JumiaPay, the company's fast-growing fintech offering.
Jumia recently ended operations in Rwanda and divested its hotel and flight service, Jumia Travel, to a South African partner. While these divestments may buy time for Jumia to rework its business model, investors should avoid the tech stock until the company's long-term vision becomes clearer.
Initially valued at $1.1 billion, Jumia was the first Africa-focused start-up to earn a unicorn valuation and list on the New York Stock Exchange. Although initially well received, things quickly went downhill for the e-commerce platform.