The French e-commerce platform, which operates in West Africa , could not resist the financial power of Jumia.
After eight months of audit, the two funds in the running to invest 20 million euros there have withdrawn.
In the land of start-ups, the story does not always end well... Latest example with demand
of judicial liquidation carried out by Afrimarket with the Paris Commercial Court . A
decision imposed on the founders, Rania Belkahia and Jeremy Stoss, after their new
potential investors only ended up withdrawing from the fundraising process at the end of last July.
The Parisian start-up, which operates one of the very first e-commerce marketplaces in West Africa
West , wanted to raise fresh capital to fuel its growth and give itself a chance to resist the
giant Jumia, which raised nearly $ 200 million when it floated on the New York Stock Exchange
last April, explained to "Echos" Rania Belkahia: "During the course of last year, we
started looking for investors for a round of financing of 20 million euros and we entered
in discussion with several funds. We were in DueDil [pre-emergence audit process] with several actors.
Two of them positioned themselves in the final stretch, but let us down in the middle of the summer. the
principle of a start-up is that if you do n't finance it, it stops. »
A market that is not mature enough
The fall is hard for the founders of the nugget, who had bet in its development a total of 50
million euros since 2013, via fundraising (13.5 million in total), bank loans and its
turnover. “Our historical investors have supported us from the beginning and during the eight months of
the audit period with the funds concerned, but after that there was no more cash ..." By liquidating his
activity, the company left 250 people unemployed, including around thirty in France. The CEO and the President
of Afrimarket want to accompany them during this transition period , in particular those present on the
African continent. For the French, the future seems more clearly traced since their acquired experience
in e-commerce is highly sought after. Moreover, some have already joined other players such as Amazon.
But what explains this sudden end, which reminds us that the start-up model is based first and foremost on
great risk taking . First of all, the maturity of the market: e-commerce, which is extremely
encouraging in Africa , has not yet delivered all its promises and still comes up against
operational complexities that end up weighing on the balance sheet.
Then, the fright of investors, who believe that only a big player can really emerge and
impose itself, which Jumia was able to concretize by financing itself massively on the American stock market.
Finally, the growth model , which is based on very significant investments. On this point, Rania
Balkahia explains that he misjudged the real capital needs: “We were all aware that this
e-commerce market in Africa requires a lot of capital and it would have taken ten times more to get there.
to arrive. It requires colossal means to evangelize and stimulate it. »
Despite this lack of confidence and funds earmarked for the continent with 1.3 billion inhabitants, the start-up
had nevertheless succeeded in ensuring a fine rise over the past four years: the volume of business
of its platform ended up reaching 30 million euros in 2018, against 250,000 euros in 2015, and it had passed the half-million customer mark since its inception. It had also succeeded in reducing its costs
of acquisition by eight and achieved a positive gross margin. But that will not have been enough for the young shoot
promising, but faced with the reality of a system not yet mature enough to support it
any further.
Which inevitably leaves a bitter taste to the president of Afrimarket, who wants to end the adventure before
try a new experience based on what you have learned, while meditating on Winston 's phrase
Churchill, who now resounds in a loop in his head: "Success is going from failure to failure without
lose his enthusiasm. »