Jumia almost fooled the world that it is an African Start-Up. An analysis of its IPO filing tells a different story.

The past week has been with hysteria surrounding the listing of JUMIA on the NYSE, with celebrations about how the “African” start-up had been admitted into the big leagues. However, an analysis of JUMIA’s SEC filings has led to the African tech community questioning the e-commerce retailer’s identity as an African company.

While the company runs the largest e-commerce business across Africa with operations in 14 countries including Nigeria, Kenya, Morocco and Egypt, it is incorporated in Germany, has its headquarters in Dubai with its central tech team based in Portugal, and as its IPO filing shows.

The term “under German law” appears no less than 37 times in the filing that was made. The company’s principal share register is in German; hence it will be liable to pay its corporate taxes in the European country. This does not mean that it will not pay other local taxes in the countries that it operates in.

Then there’s the issue of its founders. Jumia was co-founded in 2012, by Sacha Poignonnec and Jeremy Hodara, two French former McKinsey associates who specialized in retail, packaging and e-commerce while with the consulting firm. The 38-year olds are from the traditional background of a lot of French executives via Paris business schools. They opened shop in Nigeria in 2012 alongside Tunde Kehinde (Nigerian) and Raphael Kofi Afaedor (Ghanaian) who both left the company in 2015.

In an interview with CNBC on Friday at the time of its listing, the CEO was questioned on the company’s assumed identity. In particular, the interviewer questioned why the company called itself African yet its technology centre was located in Portugal and had its management team located in Dubai. The only presence it had in Africa were the warehouses where it employees over 5000 Africans.

A growing number of mainstays in Africa’s tech ecosystems fit this bill. Zola Electric, the solar power company with operations in five African countries is headquartered in the Netherlands with a technology lab in San Francisco. Andela, the software developer training and outsourcing company with campuses in four African countries is incorporated and headquartered in New York.

Until that “unfortunate” reality changes, experts predict more African start-ups will aim to get incorporated abroad to maximize access to venture capital especially as funding pools closer to home are remain unlocked. “Access to funding is a great driver for incorporating outside,” Jha reiterates. “Today, Jumia’s IPO is possible because of Rocket Internet [its parent company incorporated in Germany].” Companies seem to be deterred by the policy uncertainty that comes in most African markets, therefore, to an extent being incorporated in another country is a practical business solution.

The story of JUMIA being an African start-up is obviously the work of a million-dollar public relations firm from Wall Street. It has given the company great leverage and a great story to tell. It is sad, however, that it distorts the true picture of the challenges that the continent’s start-ups face. Its Eurocentric background gives the company access to corridors of power African start-ups face. JUMIA is not African in ownership or management, it is only the market that gives it access to the term “African start-up.” Can Anglo-America be called African because its primary market is in Africa?

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