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May 26, 2019
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A young entrepreneur is building the Amazon of Bangladesh

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At just 26, Waiz Rahim is supposed to be involved in the family business, having returned home in 2016 with an engineering degree from the University of Southern California. Instead, the young entrepreneur is plotting to build the Amazon of Bangladesh.

Deligram, Rahim’s vision of what e-commerce looks like in Bangladesh, a country of nearly 180 million, is making progress, having taken inspiration from a range of established tech giants worldwide, including Amazon, Alibaba and Go-Jek in Indonesia.

It’s a far cry from the family business. That’s Rahimafrooz, a 55-year-old conglomerate that is one of the largest companies in Bangladesh. It started out focused on garment retail, but over the years its businesses have branched out to span power and energy and automotive products while it operates a retail superstore called Agora.

During his time at school in the U.S., Rahim worked for the company as a tech consultant whilst figuring out what he wanted to do after graduation. Little could he have imagined that, fast-forward to 2019, he’d be in charge of his own startup that has scaled to two cities and raised $3 million from investors, one of which is Rahimafrooz.

Deligram CEO Waiz Rahim [Image via Deligram]

“My options after college were to stay in U.S. and do product management or analyst roles,” Rahim told TechCrunch in a recent interview. “But I visited rural areas while back in Bangladesh and realized that when you live in a city, it’s easy to exist in a bubble.”

So rather than stay in America or go to the family business, Rahim decided to pursue his vision to build “a technology company on the wave of rising economic growth, digitization and a vibrant young population.”

The youngster’s ambition was shaped by a stint working for Amazon at its Carlsbad warehouse in California as part of the final year of his degree. That proved to be eye-opening, but it was actually a Kickstarter project with a friend that truly opened his mind to the potential of building a new venture.

Rahim assisted fellow USC classmate Sam Mazumdar with Y Athletics, which raised more than $600,000 from the crowdsourcing site to develop “odor-resistant” sports attire that used silver within the fabric to repel the smell of sweat. The business has since expanded to cover underwear and socks, and it put Rahim’s mind to work on what he could do by himself.

“It blew my mind that you can build a brand from scratch,” he said. “If you are good at product design and branding, you could connect to a manufacturer, raise money from backers and get it to market.”

On his return to Bangladesh, he got Deligram off the ground in January 2017, although it didn’t open its doors to retailers and consumers until March 2018.

E-commerce through local stores

Deligram is an effort to emulate the achievements of Amazon in the U.S. and Alibaba in China. Both companies pioneered online commerce and turned the internet into a major channel for sales, but the young Bangladeshi startup’s early approach is very different from the way those now hundred-billion-dollar companies got started.

Offline retail is the norm in Bangladesh and, with that, it’s the long chain of mom and pop stores that account for the majority of spending.

That’s particularly true outside of urban areas, where such local stores almost become community gathering points, where neighbors, friends and families run into each other and socialize.

Instead of disruption, working with what is part of the social fabric is more logical. Thus, Deligram has taken a hybrid approach that marries its regular e-commerce website and app with offline retail through mom and pop stores, which are known as “mudir dokan” in Bangladesh’s Bengali language.

A customer can order their product through the Deligram app on their phone and have it delivered to their home or office, but a more popular — and oftentimes logical — option is to have it sent to the local mudir dokan store, where it can be collected at any time. But beyond simply taking deliveries, mudir dokans can also operate as Deligram retailers by selling through an agent model.

That’s to say that they enable their customers to order products through Deligram even if they don’t have the app, or even a smartphone — although the latter is increasingly unlikely with smartphone ownership booming. Deligram is proactively recruiting mudir dokan partners to act as agents. It provides them with a tablet and a physical catalog that their customers can use to order via the e-commerce service. Delivery is then taken at the store, making it easy to pick up, and maintaining the local network.

“We’ll tell them: ‘Right now, you offer a few hundred products, now you have access to 15,000,’ ” the Deligram CEO said.

Indeed, Rahim sees this new digital storefront as a key driver of revenue for mudir dokan owners. For Deligram, it is potentially also a major customer acquisition channel, particularly among those who are new to the internet and the world of smartphone apps.

This offline-online model — known by the often-buzzy industry term “omnichannel” — isn’t new, but in a world where apps and messaging is prevalent, reaching and retaining users is challenging, particularly in emerging markets.

“It’s not easy to direct people to a website today, and the app-first approach has made it hard,” Rahim said. “We looked at how companies in Indonesia and India overcame these challenges.”

In particular, he studied the work of Go-Jek in Indonesia, which uses an agent model to push its services to nascent internet users, and Amazon India, which leans heavily on India’s local “kirana” stores for orders and deliveries.

In Deligram’s case, the mudir dokan picks up sales commission as well as money for every delivery that is sent to their store. Home deliveries are possible, but the lack of local infrastructure — “turn right at the blue house, left at the white one, and my place is third from the left,” is a common type of direction — makes finding exact locations difficult and inefficient, so an additional cost is charged for such requests.

E-commerce startups often struggle with last-mile because they rely on a clutch of logistics companies to fulfill orders. In a rare move for an early-stage company, Deligram has opted to run its entire logistics process in-house. That obviously necessitates cost and likely provides significant growing pains and stress, but, in the long term, Rahim is betting that a focus on quality control will pay out through higher customer service and repeat buyers.

A prospective Deligram customer flips through a hard copy of the company’s product brochure in a local store [Image via Deligram]

Startups on the rise in Bangladesh

Rahim’s timing is impeccable. He returned to Bangladesh just as technology was beginning to show the potential to impact daily life. Bangladesh has posted a 7% rise in GDP annually every year since 2016, and with an estimated 80 million internet users, it has the fifth-largest online population on the planet.

“We are riding on a lot of macro trends; we’re among the top five based on GDP growth and have the world’s eighth-largest population,” Rahim told TechCrunch. “There are 11 million people in middle income — that’s growing — and our country has 90 million people aged under 30.”

“An index to track the growth of young people would be [capital city] Dhaka… you can just see the vibrancy with young people using smartphones,” he added.

That’s an ideal storm for startups, and the country has seen a mix of overseas entrants and local ventures pick up speed. Alibaba last year acquired Daraz, the Rocket Internet-founded e-commerce service that covers Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal, while the Chinese giant also snapped up 20% of bKash, a fintech venture started from Brac Bank as part of the regional expansion of its Ant Financial affiliate.

Uber, too, is present, but it is up against tough local opposition, as is the norm in Asian markets.

That’s because Bangladesh’s most prominent local startups are in ride-hailing. Pathao raised more than $10 million in a funding round that closed last year and was led by Go-Jek, the Indonesia-based ride-hailing firm valued at more than $9 billion that’s backed by the likes of Tencent and Google. Pathao is reportedly on track to raise a $50 million Series B this year, according to Deal Street Asia.

Pathao is one of two local companies that competes alongside Uber in Bangladesh [Image via Pathao]

Its chief rival is Shohoz, a startup that began in ticketing but expanded to rides and services on-demand. Shohoz raised $15 million in a round led by Singapore’s Golden Gate Ventures, which was announced last year.

Deligram has also pulled in impressive funding numbers, too.

The startup announced a $2.5 million Series A raise at the end of March, which Rahim wrote came from “a network of institutional and angel investors;” such is the challenge of finding a large check for a tech play in Bangladesh. The investors involved included Skycatcher, Everblue Management and Microsoft executive Sonia Bashir Kabir. A delighted Rahim also won a check from Rahimafrooz, the family business.

That’s not a given, he said, admitting that his family did initially want him to go to work with their business rather than pursuing his own startup. In that context, contributing to the round is a major endorsement, he said.

Rahimafrooz could be a crucial ally in future fundraising, too. Despite an improving climate for tech companies, Bangladesh’s top startups are still finding it tough to raise money, especially with overseas investors that can write the larger checks that are required to scale.

“I think the biggest challenge is branding. Every time I speak with new investors, I have to start by explaining where Bangladesh is, or the national metrics, not even our business,” Pathao CEO Hussain Elius told TechCrunch.

“There’s a legacy issue. Bangladesh seems like a country which floods all the time and the garment sector going down — that’s a part of the story but not the full story. It’s also an incredible country that’s growing despite those challenges,” he added.

Pathao is reportedly on track to raise a $50 million Series B this year, according to Deal Street Asia. Elius didn’t address that directly, but he did admit that raising growth funding is a bigger challenge than seed-based financing, where the Bangladesh government helps with its own fund and entrepreneurial programs.

“It’s hard for us as we’re the first ones out there, but it’ll be easier for the ones who’ll follow on,” he explained.

Still, there are some optimistic overseas watchers.

“We remain enthusiastic about the rapidly expanding set of opportunities in Bangladesh,” said Hian Goh, founding partner of Singapore-based VC firm Openspace — which invested in Pathao.

“The country continues to be one of the fastest-growing economies in the world, underpinned by additional growth in its garments manufacturing sector. This has blossomed into an expanding middle class with very active consumption behavior,” Goh added.

Growth plans

With the pain of fundraising put to the side for now, the new money is being put to work growing the Deligram business and its network into more parts of Bangladesh, and the more challenging urban areas.

Geographically, the service is expanding its agent reach into five more cities to give it a total of seven locations nationwide. That necessitates an increase in logistics and operations to keep up with, and prepare for, that new demand.

Deligram workers in one of the company’s warehouses [Image via Deligram]

Rahim said the company had handled 12,000 orders to date as of the end of March, but that has now grown past 20,000 indicating that order volumes are rising. He declined to provide financial figures, but said that the company is on track to increase its monthly GMV volume by six-fold by the end of this year. Electronics, phones and accessories are among its most popular items, but Deligram also sells apparel, daily items and more.

Interestingly, and perhaps counter to assumptions, Deligram started in rural areas, where Rahim saw there was less competition but also potentially more to learn through a more early-adopter customer base. That’s obviously one major challenge when it comes to growth, and now the company is looking at urban expansion points.

On the product side, Deligram is in the early stages of piloting consumer financing using its local store agents as the interface, while Rahim teased “exciting IOT R&D projects” that he said are in the planning stage.

Ultimately, however, he concedes that the road is likely to be a long one.

“Over the last 18-20 years, modern retail hasn’t made much progress here,” Rahim said. “It accounts for around 2.5% of total retail, e-commerce is below 1% and the long tail local stores are the rest.”

“People will eventually shift, but I think it’ll take five to eight years, which is why we provide the convenience via mom and pop shops,” he added.

2019 Audi RS 5 review: A bruising high-tech cruiser

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The Audi RS 5 Sportback is an animal. Tamed, sure, but not domesticated. It’s important to remember as one day, maybe next week or next year or both, the RS 5 will revert to its natural state and become fervid, wild and unforgiving.

The RS 5 sedan shares a similar look to the everyday Audi A5 and S5. The RS 5 is a different animal altogether. At a moments notice it can go from a Home Depot hauler to a street brawler. Even in its most mild form, the RS 5 feels like a cat ready to pounce, but click few settings, and the cat turns feral.

This five-door sedan is raw and unhinged, and there’s an unnatural brutally under the numerous electronic systems. Its twin-turbo 2.9L power plant roars while the Audi all-wheel drive system keeps the rubber on the tarmac. It’s insane, and like most vacations, it’s lovely to visit, but I wouldn’t want to live with the RS 5.

Review

After a long, cold winter, it’s finally nice here in Michigan. Leaves are peaking out, and the grass is turning green. The severe winter left Michigan’s crumbling roads in a state of disrepair. There are potholes the size of bathtubs and this Audi is equipped with rubber bands for tires. This became problematic during my time with the vehicle.

The RS 5 is Audi’s ultimate version of a midsize sports sedan. The tester I’m driving costs $99,990 and is outfitted with every option available including ceramic front brakes, 174 mph limiter,

Like most modern sports cars, the RS 5 has a bevy of driver-selectable options. Everything is adjustable, from the seats to the throttle response to the exhaust note. The RS 5 is a track superstar, and the adjustable options reflect that pedigree. Options are adjustable from intense to hardcore. Clicking from the so-called comfort setting to dynamic is like going from a 10 to a 12. Want even more? Click the transmission to sport, and the car turns from feral to rabid.

Driving the RS 5 is an exercise in restraint. The car leaps off the line with intoxicating enthusiasm. The shifts drop into place with German precision, encouraging the driver to go faster and faster. The RS 5 isn’t a commuter car. This isn’t a car that should be relegated to a life of driving to and from an office park. The RS 5 is built for the weekend racer and never lets you forget it.

The RS 5 offers impressive driving dynamics thanks mostly to the twin-turbo power and quick transmission. Engage the transmission’s sport mode and it seems to read the driver’s mind. It feels like there’s a camera looking at the road ahead telling the transmission that at any moment the driver will want to click down three gears to pass a meandering crossover. And then, when called upon, the RS 5 is ready to overtake, slamming the occupants into the quilted leather seats.

It doesn’t matter if the RS 5 is shooting off the line or going 70 down an expressway; when the driver mashes the accelerator to the floor, heads snap backward.

Driving the Audi RS 5 is like using a cheat code. The all-wheel drive system and instantaneous shifts can make anyone feel like a professional driver. To be clear, there are faster and quicker cars than the RS 5. I’ve been in those cars. The RS 5 is different in an old-fashioned way as few new cars feel as raw as the RS 5. The way it lays down its rather modest amount of power results in its nervous smile.

The RS 5 is a car with an old soul. Hidden under the modern German engineering is a vehicle wanting to break free of the electronic restraints. The RS 5 doesn’t want the advanced traction control or adjustable exhaust note. It wants to spend every Saturday morning at the track burning through another set of its low-profit tires. This car feels like a sports car from an era where it took skill to stay on the track.

The RS 5 feels as quick as the fastest electric sedans though by the numbers it’s slower. Audi pegs the RS 5 with a 0-60 time of 3.8 seconds. Some electric counterparts can best that time by more than a second. Audi’s use of a twin-turbo on an ingenious V6 engine enables the RS 5 to launch with the best of them though it will quickly fall behind as the speed climbs.

The ride quality is adjustable but always harsh. The RS 5 rides like a work truck in its comfort setting. In dynamic, it feels like a farm tractor. This stiff ride helps the RS 5 stay planted but it cannot ever be described as comfortable or enjoyable. Sure, the RS 5 can throw its occupants sideways while taking an expressway ramp at 70 mph. It also feels like it will shake itself apart while cruising down a side street.

The RS 5 shares the same proportions as Audi’s entry-level A5. It’s a midsize car that feels bigger than it should. The RS 5, like its A5 and S5 siblings, is comfortable and roomy for a vehicle of its size. There is plenty of room in the front while its a bit tight in the back for a couple of adults.

The one I’m driving is the Sportback trim. It features a sort of rear door that opens like a hatchback without sporting the trademark hump. It’s similar to that found on Audi’s fantastic A7/S7 series. The configuration gives the operator more convenient access to the rear storage while retaining the look of a sedan. I like it.

The infotainment system inside the 2019 RS 5 is of the same design as Audi’s used for years. It’s old but aging nicely. Everything is controlled by a large knob located by the shifter. It’s still one of the best user interface available though several 2019 Audi vehicles are equipped with a brand-new system that’s quicker and even easier to use thanks to a touchscreen with haptic feedback.

Besides a few choice details and carbon fiber trim, the inside of the RS 5 is unremarkable and rather pedestrian. That’s fine with me. Above all, the cabin is usable and comfortable. RS 5 buyers are not looking for luxury appointments. They’re here for the speed, and on that, the RS 5 delivers.

The RS 5 is proof we’re living in the golden age of internal combustion engines. The biturbo 2.9L engine is brilliant. While cruising around town, the power plant is easy going and agreeable. In stop and go traffic, the turbos are restrained and slow to spin up.

What I’m saying is the RS 5 is properly tuned and will only snap necks if instructed to do so.

I came for the performance but stayed for the noise.

The RS 5 is loud. I love it, and my kids love it. I’m sure my neighbors will be glad when this tester goes home. The RS 5 has the performance chops of the fastest electric sedan, but the exhaust is a constant loud reminder that it burns fossil fuel. The exhaust roars while the turbos scream. In comfort mode, the exhaust is mechanically subdued, and yet it still growls. In dynamic, it sounds like an angry dragon as it spits, grumbles and roars an explosive warning to everyone in a three block radius.

There are a few competitors to the RS 5, but only the BMW M5 matters. The M5 is the classic sports sedan with a pedigree that spans generations. Between the two sedans, the performance is similar though, by most accounts, the BMW is quicker to 60 mph by a half a second. The BMW uses a 600 horsepower 4.4L twin-turbo V8 while the Audi taps a twin-turbo V6 that outputs 444 horsepower. A BMW M5 starts around $100,000 and can easily reach well north of that. The $74,00 Audi RS 5 starts closer to the sticker of the smaller BMW M3. The fully-loaded example I’m driving costs $99,990.

The pricing between the Audi RS 5 and M5 only tells part of the story and shoppers should spend time in both vehicles to understand the differences. Some might get drunk on the RS 5’s raw power while others could be sold on the M5’s refined performance and superior ride quality. If it were me, I would opt for the RS 5 and dump the difference in cost into a savings account to pay for speeding tickets.

There are countless examples of people expecting wild animals to behave like domesticated animals. But there’s a line between a tamed animal and a domesticated animal. One is still wild and shouldn’t be trusted. At a moment’s notice, the tamed animal can attack. That brings us to the Audi RS 5 Sportback.

To be clear, the RS 5 is not a grand tourer or a grocery getter. It’s an intense performance vehicle. For the right person, it will give countless thrills and endless smiles. During my time with the RS 5, I found myself continually egging the vehicle a bit faster and louder. The noise is addicting but the ride is back breaking.

The ride quality is intense and could be a deal breaker for some people. It’s rough and unforgiving and tuned for performance. The RS 5 is not for people with back problems or those that need a zippy commuter. For those, look at the much-less-expensive but still impressive Audi S5.

The RS 5 deserves a life on a track or open road. This sedan is a bottomless pit of power and thrills. The RS 5 is invigorating, a bit backbreaking but ultimately unforgettable.

Blueland launches with a suite of eco-friendly cleaning supplies designed to reduce plastic waste

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Sarah Paiji had the idea to launch the eco-friendly refillable cleaning supply retailer Blueland after hearing about the abundance of microplastics in the water she was using to dilute her child’s baby formula.

Paiji wanted to cut back on her plastic consumption, and reduce her contribution to the overabundance of plastic waste in the environment, but felt that as a consumer she didn’t have a choice. So the former venture capital investor from the consumer startup brand studio Launch set out to create one.

The answer she came up with is Blueland, a new line of cleaning products that launches today. Blueland’s cleaners — a bathroom cleaner, glass cleaner, and multi-purpose cleaner —  are sold as tablets that customers add to the cleaning containers the company provides.

“These cleaners are mostly water,” says Paiji. “I’m paying for a plastic bottle that I don’t really need and water which I have at home for free.”

By adding water to the company’s cleaning formulation in refillable containers the company sells, Blueland thinks its customers over time can eliminate the need for 100 billion single-use plastic bottles in the U.S.

Blueland cleaning products/Image courtesy of Blueland

To provide the initial marketing push and continue its product development and sales efforts, the company has raised $3 million in a new round of funding from Global Founders Capital, Comcast Ventures, Cross Culture Ventures, BAM Ventures, along with individual investors like Justin Timberlake and the founder of the Los Angeles-based sustainable fast food chain, Sweetgreen, Nicholas Jammet; and sustainable online food retailer, Thrive Market, Nick Green.

After coming up with the idea Paiji had to find a manufacturer, who’d be willing to help reinvent an entire product category for a startup retailer.

Blueland also wasn’t Paiji’s first choice for a new startup idea. That would have been a botox bar that would sell cosmetic treatments to folks who wanted treatments, but didn’t want to pay high prices for them.

After putting the brakes on the botox business, Paiji reached out on LinkedIn to Syed Naqzi, the director of research and development at Method with her pitch for the cleaning product business.

With Naqzi on board, the company began filing patents for its unique process and the products it’s bringing to market, says Paiji. “Everything is proprietary everything is backed by patents,” she says.

While Paiji won’t disclose who the manufacturing partner is for the cleaning supplies, she did note that the company was in an adjacent consumables category to cleaners.

Within a year of reaching out to Naqzi last April, Paiji had a product supplier and the $3 million she needed to go to market.

Blueland refills/Image courtesy of Blueland

Joining Paiji and Naqzi in setting up the business was John Moscari, a fellow Harvard Business School classmate of Paiji’s who’d launched a company called Bundle Organics.

The company’s refills cost $2 and the initial cleanup kits clock in at $30. “With the refills it’s unequivocally cheaper than buying a full bottle on the market,” says Paiji.

The refills are 300 times lighter and 200 times smaller than traditional packaging for cleaning supplies and the company has plans to develop new products with similar packaging footprints across adjacent categories each quarter.

Just from a shipping perspective alone we cut out 90% because one to one we’re that much smaller,” says Paiji. 

Other, far larger, companies are thinking about their waste streams and end of life issues around their products — an issue which is becoming more important since China tightened the regulations around the scrap materials it would collect — and the amount of contamination those pallets of scrap could contain.

Last year, a coalition of major manufacturers of consumer packaged goods and foods formed Loop — an ambitious project to create zero-waste supply chains for their products with consumers who’d opt in.

Taking their cues from the milkman models of years long passed, companies like Procter & Gamble, Nestle, PepsiCo, Unilever, worked with the company TerraCycle to develop an updated version of the plan.

Consumers get refillable containers and as they use up the items, they can call a Loop pick up driver to take their containers away to be refilled or send them off at a UPS store.

Paiji argues that Blueland does something different — with lower carbon emissions coming from the process and a greater impact on reuse.

“We’ve completely invented a new form factor for this,” she says. “And we’re providing a more convenient way for people to reuse and refill.”

Blueland box/Image courtesy of Blueland

 

African e-commerce startup Jumia’s shares open at $14.50 in NYSE IPO

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Pan-African e-commerce company Jumia listed on the New York Stock Exchange today, with shares beginning trading at $14.50 under ticker symbol JMIA. This comes four weeks after CEO Sacha Poignonnec confirmed the IPO to TechCrunch and Jumia filed SEC documents.

With the public offering, Jumia becomes the first startup from Africa to list on a major global exchange.

In an updated SEC filing, Jumia indicated it is offering 13,500,000 ADR shares, for an opening price spread of $13 to $16 per share, representing 17.6 percent of all company shares. The IPO could raise up to $216 million for the internet venture.

Since the original announcement (and reflected in the latest SEC docs), Mastercard Europe pre-purchased $50 million in Jumia ordinary shares.

The IPO creates another milestone for Jumia. The company became the first African startup unicorn in 2016, achieving a $1 billion valuation after a funding round that included Goldman Sachs, AXA and MTN.

There’s a lot to breakdown on Jumia’s going public. The company is often dubbed the “Amazon of Africa,” and like Amazon, Jumia comes with its own mixed buzz. Jumia’s SEC F-1 prospectus offers us more insight into the venture, and perhaps any startup from Africa, thus far.

About Jumia

Founded in Lagos in 2012 with Rocket Internet  backing, Jumia now operates multiple online verticals in 14 African countries. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.

Jumia’s original co-founders included Nigerian tech entrepreneurs Tunde Kehinde and Raphael, but both departed in 2015 to form other startups in fintech and logistics.

Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape. Jumia has extended this infrastructure as an e-commerce fulfillment product called Jumia Services.

Jumia has also opened itself up to Africa’s traders by allowing local merchants to harness Jumia to sell online. The company has over 80,000 active sellers on the platform using the company’s payment, delivery, and data-analytics services, Jumia Nigeria CEO Juliet Anammah told TechCrunch a previously.

The most popular goods on Jumia’s shopping site include smartphones, washing machines, fashion items, women’s hair care products, and 32-inch TVs, according to Anammah.

Jumia an African startup?

Like Amazon, Jumia brings its own mix of supporters and critics. On the critical side, there are questions of whether it’s actually an African startup. The parent for Jumia Group is incorporated in Germany and current CEOs Jeremy Hodara and Sacha Poignonnec are French.

On the flipside, original Jumia co-founders (Kehinde and Afeodor) are African. The company is headquartered (and also incorporated) in Africa (Lagos), operates exclusively in Africa, pays taxes on the continent, employs 5,128 people in Africa (page 125 of K-1), and the CEO of its largest country operation (Nigeria) Juliet Anammah is Nigerian.

The Africa authenticity debate often shifts into questions of a Jumia diversity deficit, which is of course important from Silicon Valley to Nairobi. The company’s senior management and board is a mix of Africans and expats. Golden State Warriors basketball player and tech investor Andre Iguodala joined Jumia’s board this spring with a priority on “diversity and making sure the African culture is in the company,” he told TechCrunch.

Can Jumia turn a profit?

The Jumia authenticity and diversity debates will no doubt roll on. But the biggest question—the driver behind the VC, the IPO, the founders, and the people buying Jumia’s shares—is whether the startup can generate profits and ROI.

Obviously some of the world’s top venture investors, such as Jumia backers Goldman, AXA, and Mastercard, think so. But for Jumia skeptics, there are the big losses. The company has generated years and years of losses, including negative EBITDA of €172 million in 2018 compared to revenues of €139 that same year.

To be fair to Jumia, most startups (e-commerce startups in particular) rack up losses for years before getting into the black. And operating in a greenfield sector in Africa—where it had to create much of the surrounding infrastructure to do B2C online sales—has presented higher costs for Jumia than e-commerce startups elsewhere.

On the prospects for Jumia’s profitability, two things to watch will be Jumia’s fulfillment expenses and a shift to more revenue from its non-goods-delivery services, which offer lower unit costs and higher-margins. Per Jumia’s SEC F-1 index (see above) freight and shipping make up over half of its fulfillment expenses.

So Jumia has not turned a profit but its revenues have increased steadily, up 11 percent to €93.8M (roughly $106.2 million) in 2017 and up again to €130M (or $147 million) in 2018. If the company boosts customer acquisition and lowers fulfillment costs—which could come from more internet services revenue and platform investment with IPO capital—it could close the gap between revenues and losses. This reflects the equation for most e-commerce startups. With the IPO Jumia will have to publish its first full public financials in 2019, which will provide a better picture of profitability prospects.

Jumia’s IPO and African e-commerce?

There’s is, of course, a bigger play in Jumia’s IPO. One connected to global e-commerce and the future of online retail in Africa.

Jumia going public comes as Africa’s e-commerce landscape has seen its share of ups and downs, notably several failures in DealDey shutting down and the distressed acquisition of Nigerian e-commerce hopeful Konga.com.

As for the big global names, Alibaba has talked about Africa expansion, but for the moment has not entered in full.

Amazon  offers limited e-commerce sales on the continent, but more notably, has started offering AWS services in Africa.

And this week, DHL came on the scene launching its Africa eShop platform with 200 global retailers on board, in partnership with MallforAfrica’s Link Commerce fulfillment service.

Competition to capture Africa’s digitizing consumer markets—expected to spend $2 billion online by 2025, according to McKinsey—could get fierce, with more global entries, acquisitions, and competition on fulfillment services all part of the mix.

And finally, the outcome of Jumia’s IPO carries weight even for its competitors. “Many things, like business decisions and VC investments across Africa’s e-commerce sector are on on hold,” an African e-commerce exec told TechCrunch on background.

“Everyone’s waiting to see what happens with Jumia’s IPO and how they perform,” the exec said.

So the share-price connected to NYSE ticker sign JMIA could reflect not just investor confidence in Jumia, but investor confidence in African e-commerce overall.

Africa Roundup: Jumia files for IPO, OneFi acquires Amplify, FlexClub expands in Mexico

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Less than a decade ago IPOs, acquisitions, and global expansion by African startups were more possibility than reality. March saw all three from the continent’s tech scene.

Pan-African e-commerce company Jumia filed for an IPO on the New York Stock Exchange, per SEC documents and confirmation from chief executive Sacha Poignonnec.

In an updated filing, (since the March 12 original) Jumia indicated it will offer 13,500,000 ADR shares, for an offering price of $13 to $16 per share to trade under the ticker symbol “JMIA”. The IPO could raise up to $216 million for Jumia.

Since our first story (and reflected in the latest SEC docs) Mastercard Europe agreed up front to buy $50 million in Jumia ordinary shares.

With a smooth filing process, Jumia will become the first African startup to list on a major global exchange. The company is incorporated in Germany, but maintains its headquarters in Nigeria, and operates exclusively in Africa with 4000 employees on the continent.

The pending IPO creates another milestone for Jumia. The venture became the first African startup unicorn in 2016, achieving a $1 billion valuation after a funding round that included Goldman Sachs, AXA and MTN.

Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data. The company has started to generate annual revenues over $100 million, but like many burn-rate startups, has done so while racking up big losses.

There’ll be a lot more to cover, analyze, and debate pre and post Jumia’s NYSE bell toll—which could happen in coming weeks or months. For example, can Jumia generate a profit, is it really an African startup, will Jumia become an acquisition target for a big outside name or an acquirer of smaller startups in African e-commerce? Stay tuned for continuing TechCrunch coverage.

On the acquisition front,  Lagos based online lending startup OneFi bought Nigerian payment solutions company Amplify for an undisclosed amount.

OneFi is taking over Amplify’s IP, team, and client network of over 1000 merchants to which Amplify provides payment processing services, OneFi CEO Chijioke Dozie told TechCrunch.

The purchase of Amplify caps off a busy period for OneFi. Over the last seven months the Nigerian venture secured a $5 million lending facility from Lendable, announced a payment partnership with Visa, and became one of first (known) African startups to receive a global credit rating. OneFi is also dropping the name of its signature product, Paylater, and will simply go by OneFi (for now).

Collectively, these moves represent a pivot for OneFi away from operating primarily as a digital lender, toward becoming an online consumer finance platform.

“We’re not a bank but we’re offering more banking services…Customers are now coming to us not just for loans but for cheaper funds transfer, more convenient bill payment, and to know their credit scores,” said Dozie.

OneFi will add payment options for clients on social media apps including WhatsApp this quarter—something in which Amplify already holds a specialization and client base. Through its Visa partnership, OneFi will also offer clients virtual Visa wallets on mobile phones and start providing QR code payment options at supermarkets, on public transit, and across other POS points in Nigeria.

On the back of the acquisiton, OneFi is in the process of raising a round and will look to expand internationally, considering Senegal, Côte d’Ivoire, DRC, Ghana and Egypt and Europe for Diaspora markets.

On African startups expanding globally, FlexClub—a South African venture that matches investors and drivers to cars for ride-hailing services—announced it will expand in Mexico in a partnership with Uber after closing a $1.2 million seed round led by CRE Venture Capital.

The move comes as Africa’s tech-transit space continues to produce unique mobility solutions shaped around local needs.

FlexClub touts itself as a “gig economy investment platform” that is creating new asset classes in emerging markets, according to chief executive and co-founder Tinashe Ruzane.

That asset class, for now, is ride-hail vehicles. FlexClub allows investors to go on the site and purchase a car (ultimately managed and serviced by FlexClub). The startup then connects that car to an Uber driver who uses earnings to pay a weekly rental charge.

Those fees generate monthly, fixed-rate interest income for the investor. The driver has the option of buying the car after the 12 months, with a descending purchase price over time.

FlexClub’s platform manages the investment, rental income, and disbursement of funds across all parties. The startup also handles insurance, maintenance, and upkeep of the cars.

Ruzane envisions this as a model to finance multiple asset classes in emerging markets—where lending options are fewer for individuals who may not have credit histories.

“Our goal is to make this completely passive… where investors can invest in different kinds of assets on our platform, login to a dash, and see this is how my five cars in South Africa are doing, my vans in Mexico, my motorbikes in Indonesia — with a diversified portfolio around the world,” he explained.

FlexClub will begin work matching investors to cars and Uber drivers in Mexico in April. The startup sees opportunities to move into other mobility classes, such as Africa’s ride-hail motorcycle taxi and three-wheel tuk-tuk market, CEO Tinashe Ruzane told TechCrunch in this feature.

And finally, francophone Africa will see a boost in funds and support for startups. The Dakar Network Angels group launched last month, making its first investment to cleantech venture Coliba—an Ivorian startup that uses a mobile app to coordinate waste recycling

The deal is part of Dakar Network Angels’ mission of convening experts and capital to bridge the resource gap for startups in French-speaking Africa — or 24 of the continent’s 54 countries.

The organization — which goes by DNA for short — will offer seed fund investments of between $25,000 to $100,000 to early-stage ventures with high growth potential. These rounds will come with the entrepreneurial guidance of DNA’s angel network.

Launched in Senegal, the organization’s founder is Marieme Diop — a VC investor at Orange Digital Ventures — named the goal of bridging VC disparities between francophone and non-francophone Africa as the primary driver for DNA. She pointed to funding data by Partech indicating that 76 percent of investment to African startups goes to three English-speaking countries — Nigeria, Kenya and South Africa.

To gain consideration for DNA investment, startups must gain referral by a member. DNA will take a minority stake (less than 10 percent) in ventures that receive seed funds and provide program mentorship until exits, Diop told TechCrunch.

To become an angel, members must commit to investing a minimum of $10,000 a year (for those coming on as individuals), $20,000 (for corporates) and be on hand to support the portfolio startups, according to DNA’s Corporate Membership Charter.

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