One of Africa’s largest e-commerce companies, Jumia has gained a whopping 44% in the last month following results that impressed investors.

Jumia’s earnings per share beat by $0.70 while its revenue of $47.65M (43.27% Y/Y) beat by $233.05K. Investors typically reward stocks with share price appreciation when they beat earnings ex[ectations.

Jumia’s revenue of $47.6 million translates to about N28.5 billion in its first quarter alone. Jumia does not only operate in the Nigerian market.

Despite the gains, Jumia is still below the beloved Unicorn Status following the stock market rout that has ravaged tech stocks.

Jumia is currently valued at about $778 million down from its all-time Valuation of about $5.8 billion achieved in February 2021. Jumia shares are down 32% despite being up 44% in the last month.

Why Jumia’s share price is rising

Jumia recently released its 2022 first-quarter results reporting a smaller than expected loss while also informing investors that there is momentum in user and revenue growth.

• According to Jumia’s co-CEOs, Jeremy Hodara and Sacha Poignonnec disclosed its GMV has risen by 27% per year boosting revenue by 44% year on year a 9 quarter high.
• “We kicked off 2022 with very strong growth momentum, closing the first quarter with the highest GMV and Order growth rates of the past 9 quarters, up 27% and 40% year-over-year respectively,” co-CEOs Jeremy Hodara and Sacha Poignonnec said in a statement. “In parallel with accelerating usage growth, we continued driving platform monetization, with revenue growing by 44% year-over-year, which was also a 9-quarter high.”
• Jumia also claimed they are seeing growth momentum across all product categories with digital services and FMCG driving growth.
• The company said it posted in Q1 “the fastest order and GMV growth rates of the past nine quarters, orders accelerating by 40% year-over-year, reaching 9.3 million.”
• “We also posted a strange GMV growth, notwithstanding the FX headwinds with GMV, which seem $252.7 million, up 27% year-over-year, and 35% on a constant currency basis.”
• Jumia also stated that packages shipped during the first quarter of 2022 reached a new record of 3.5 million, on behalf of over 1,250 clients, an increase of more than 200 clients compared to the fourth quarter of 2021

Jumia Nigeria business

Jumia also stated that they were affected by the depreciation of the naira and other African currencies due to a strong dollar but still see strong momentum in growth

• “Just to give you a bit more color on the FX dynamic this quarter, we had 10 of our 11 local currencies depreciating against the dollar, in particular the Nigerian naira, the West African CFA franc, and the Moroccan dirham, depreciating by 9%, 7%, and 6% respectively against the dollar in Q1 this year compared to Q1 2021. Regardless of the FX volatility, there is very strong broad-based momentum across the business.”
• Jumia also stated that they had received payment service licenses from the CBN a major milestone for the bank stating it is a very exciting meaningful revenue growth opportunity.
• Jumia also indicates the approval allows them to process payments on behalf of third-party businesses helping boost topline revenues.
• “We achieved a major milestone in Q1 as we are granted by the Central Bank of Nigeria, a Payment Service Solution Provider license or PSSP license. This is an instrumental license that will allow us to start offering JumiaPay payment processing solutions off-platform in Nigeria. We have now obtained relevant licensees to start off-platform payment processing in our two largest markets, Nigeria and Egypt. We intend to scale the business progressively and in a disciplined manner to ensure the quality and safety of payment solutions for merchants and consumers, both on and off-platform.”