Jumia’s Billion-Dollar Blueprint? Why Axian May Be Eyeing Africa’s Amazon Despite The Losses
Jumia Technologies AG (NASDAQ:JMIA), often dubbed the "Amazon of Africa," is once again in the spotlight—this time as a potential takeover target. The Mauritius-based Axian Telecom has reportedly raised $600 million, partially earmarked for a possible acquisition of Jumia, whose market capitalization currently stands at around $500 million. Axian, which already owns an 8% stake in Jumia, appears to be positioning itself for deeper expansion across the African continent through this strategic move. While Jumia continues to post operating losses—reporting a $16.5 million loss before income tax in Q1 2025—its sweeping cost-cutting measures, asset-light model, and turnaround momentum are starting to draw attention. The company is aggressively restructuring, slashing cash burn, improving logistics, and rolling out a new logistics-as-a-service model. Let us take a closer look at why Axian may see long-term value in this loss-making e-commerce pioneer.
A Deep Pan-African Footprint With Growth Leverage In Underserved Regions
Jumia’s biggest appeal lies in its extensive reach across 11 African countries, including major markets like Nigeria, Ivory Coast, Kenya, and Egypt. While it has struggled with profitability, the company has demonstrated significant order growth, particularly in Nigeria (+22% YoY), Kenya (+36% YoY), and Ghana (+65% YoY in GMV). These markets are still underpenetrated, especially in rural and upcountry regions where Jumia is expanding rapidly with minimal fixed costs. In Q1 2025, 58% of total order volumes came from these underserved areas, up from 50% the previous year. This shows that Jumia’s model is scalable in low-density zones, a valuable asset for any telecom player like Axian looking to boost digital adoption and mobile commerce. Jumia’s customer base grew 15% YoY to 2.1 million active users, indicating growing engagement even in the face of macroeconomic pressure. By acquiring Jumia, Axian could leverage its telco infrastructure to amplify e-commerce adoption, deepen data monetization, and cross-sell fintech and payment services to an already digitizing population. For a company already entrenched in telecom across Africa, Jumia provides a ready-made platform to complement mobile data services, rural penetration initiatives, and customer monetization via bundled offerings.
Turnaround Trajectory & Structural Cost Improvements Are Materializing
Despite being a loss-making business, Jumia has visibly narrowed its losses and improved operational efficiency. In Q1 2025, it reported a loss before income tax of $16.5 million, down 58% from $39.6 million in Q1 2024. Fulfillment expense per order dropped 14% YoY to $2.07, driven by renegotiated third-party logistics contracts, staffing cuts, and optimization of routing. The company reduced its headcount by 3% and continues to operate under a highly restrictive hiring policy. Its 2025 guidance has been upgraded, with projected losses of $50–$55 million (down from $65–$70 million), and the management remains confident of achieving profitability in Q4 2026. Technology and content costs have also been restructured, with $3.7 million in annual savings expected from hosting and software license renegotiations. These structural cost initiatives, while not fully visible in Q1, are expected to compound through the rest of the year. For a potential acquirer like Axian, this means lower integration risks and a higher probability of the business achieving sustainable margins, especially if supported by synergies from a telecom backbone.
Logistics Network & Jumia Deliveries Provide Monetizable Infrastructure
Jumia’s in-house logistics and fulfillment infrastructure has historically been one of its most significant cost centers—but it is now turning into a potential revenue driver. The launch of Jumia Deliveries, a logistics-as-a-service offering, could be a major unlock for profitability. Already piloted in Ivory Coast and now rolled out in Nigeria, Jumia Deliveries allows third-party merchants and individuals to use Jumia’s extensive network of over 490 pickup stations to ship goods. The model is asset-light, profitable from Day 1, and built on existing infrastructure, meaning little to no CapEx for expansion. It enables margin expansion by increasing route density and improving utilization of existing resources. For Axian, this provides an opportunity to diversify into last-mile delivery—a critical bottleneck in Africa—without building from scratch. Moreover, it aligns with Axian’s connectivity business, allowing potential bundling of telecom services with logistics and delivery support for SMEs, social commerce sellers, and informal sector players who form the backbone of African retail.
Competitive Moats Amid Rising Global & Local E-Commerce Players
While African e-commerce is becoming increasingly competitive with entrants like Amazon (in Egypt), local players like Conga (Nigeria), and low-cost Asian platforms like Temu and Shein, Jumia maintains certain defensible advantages. It offers cash-on-delivery, pickup station deliveries, and a value proposition tailored specifically to Africa’s lower middle class—something international platforms struggle to replicate. The company has built deep vendor relationships, especially with Chinese exporters, resulting in 61% YoY growth in items sourced internationally in Q1 2025. In categories like fashion, phones, and home accessories, Jumia’s pricing is becoming more competitive, aided by its improved sourcing capabilities. Regulatory developments also play in Jumia’s favor, with African nations increasingly tightening rules on international drop-shipping and de minimis thresholds, thereby raising the barrier for nonresident platforms. Jumia’s localization, regulatory compliance, and delivery infrastructure create natural moats. For Axian, which may face similar regulatory constraints if entering e-commerce independently, acquiring Jumia eliminates these barriers and offers a running start in an ecosystem where trust, brand recognition, and last-mile reliability are make-or-break factors.
Final Thoughts
Source: Yahoo Finance
We can see a massive spike in Jumia's stock price after Axian’s interest in acquiring the company. Its stock price and its LTM EV/ Revenue multiple has tripled from April to July and the recent acquisition interest has kept the stock price high even though the company has a negative EBITDA. We believe that Jumia’s ongoing transformation—marked by structural cost cuts, improved logistics efficiency, growing order volumes, and asset monetization—is beginning to shift investor narratives from persistent losses to eventual profitability. While its top-line revenue has faced temporary setbacks due to currency depreciation and corporate sales decline, its underlying consumer business is showing signs of strong momentum. For Axian Telecom, this might prove to be a highly pertinent acquisition as it could provide a strategic platform to synergize its telecom infrastructure with Africa's growing appetite for digital commerce, logistics services, and mobile-first retail.
