The May 5, 2025, disclosure by Baillie Gifford, a renowned long-term British institutional investor, that it had completely sold off its remaining stake in Jumia Technologies at a substantial loss has sent ripples across the African investment landscape. The move, widely interpreted as a loss of faith in one of Africa’s most recognized e-commerce platforms, casts a dark cloud over future prospects for African tech companies seeking credibility on the global stage.

Baillie Gifford’s departure from Jumia, once hailed as the poster child for African e-commerce, delivers a loud and clear message: Jumia must urgently reassess and overhaul its business sustainability strategy or risk fading into irrelevance.

From Early Enthusiasm to Dismal Exit

Baillie Gifford initially championed Jumia’s listing on the New York Stock Exchange (NYSE) in 2019 by purchasing an 11% stake—an investment that symbolized strong international confidence in Africa’s potential. However, by January 2024, the firm had reduced its shareholding to 9.2%, then to 7.4% in November 2024, and finally exited completely in May 2025, selling off all 18.1 million American Depository Receipts (ADRs) it held.

This complete divestment is especially significant considering Baillie Gifford’s reputation for backing high-growth, future-forward companies such as Tesla, Shopify, and MercadoLibre. Their exit signals more than just dissatisfaction with Jumia—it suggests systemic issues within the company that outweigh its perceived future value.

Jumia’s Operational Decline and Crisis History

Founded as a pan-African marketplace to capitalize on the continent’s growing digital economy, Jumia enjoyed early praise and was seen as a trailblazer. However, over time, its operational base shrank from 14 countries to just nine. The abrupt withdrawal from Gabon, the Democratic Republic of Congo, and Cameroon highlighted internal challenges and hinted at a flawed business model that struggled to adapt to Africa’s diverse market dynamics.

Jumia has also been mired in controversy. In 2020, the BBC dubbed it “the e-commerce startup that fell from grace,” following accusations of overstating financial metrics, shareholder discontent, and the resignation of co-founders Jeremy Hodara and Sacha Poignonnec. Allegations included inflating user numbers, misrepresenting orders and cancellations, and insufficient disclosure of related-party transactions.

Compounding these issues, Jumia has faced persistent financial losses. In Q2 2021, it posted an operating loss of $51.6 million—an increase from $41.6 million in the previous year. The trend continued into 2024, with a 17% year-over-year revenue drop in Q2 to $36.5 million, alongside a 5% decline in gross merchandise volume (GMV), which stood at $170 million.

Investor Trust Erodes Amid Financial Missteps

Since its IPO, Jumia’s stock price has been volatile, driven largely by investor skepticism and recurring financial mismanagement. The company raised $196 million from its IPO at $14.50 per share in April 2019, but within a month, Citron Research published a damning report accusing Jumia of significant misrepresentations in its prospectus. The fallout was swift, with Jumia’s stock price plummeting by 18.8% on May 9, 2019, and spiraling further downward over the years—now trading below $3.43 per share.

Legal troubles soon followed. A class-action lawsuit accused Jumia of securities fraud, which the company chose to settle out of court, paying $5 million in damages—a figure symbolic of deeper structural cracks.

Meanwhile, other top financial players, including Goldman Sachs, JPMorgan, Morgan Stanley, and Citi, have also trimmed their exposure to Jumia below the 5% disclosure threshold, signaling a widespread loss of confidence among institutional investors.

Africa’s E-commerce Future: Jumia or Someone Else?

While Jumia’s journey has been tumultuous, it does not necessarily reflect the entire African e-commerce landscape. Experts argue that Jumia’s identity as a German-registered company with an African footprint creates a disconnect. Its narrative does not truly embody Africa’s entrepreneurial potential. Many point to indigenous players like Konga in Nigeria and Takealot in South Africa as better-positioned contenders to lead the charge for African e-commerce dominance.

At the 2021 Intra-African Trade Fair (IATF) in Durban, the consensus among analysts was that Nigeria’s Konga was emerging as the continent’s most promising e-commerce platform. This view was backed by its strong understanding of the Nigerian market, an agile management team, youth-driven workforce, reliable logistics infrastructure, and debt-free growth model. Konga’s ability to self-finance its expansion provides it with operational flexibility that heavily leveraged rivals like Takealot lack.

Takealot, backed by U.S. hedge fund Tiger Global and South Africa’s Naspers, remains a formidable competitor. However, external debt has constrained its profitability trajectory. Meanwhile, Konga continues to scale across Nigeria and may become the first truly pan-African e-commerce brand to rival global players.

Jumia’s Hopeful Projections—and Skepticism

Despite its troubles, Jumia remains optimistic about the future. The company has outlined a roadmap to reduce pre-tax losses to $25–$30 million by 2026 and aims to achieve profitability by the final quarter of that year. Analysts remain skeptical, given its persistent operational inefficiencies, tarnished brand image, and poor investor relations.

Even with a positive trajectory, recovering investor trust—especially after the exit of high-profile names like Baillie Gifford—will be an uphill battle. The company’s earlier missteps have eroded its credibility, leaving a perception of unreliability that may take years to reverse.

Broader Implications for African Startups

Baillie Gifford’s departure isn’t just a Jumia problem—it raises wider questions about the readiness of African startups to compete on the global stage. If the continent’s most visible tech brand struggles to keep foreign investors, what message does that send about Africa’s investment climate?

This development underscores the importance of robust governance, accurate financial disclosures, and local-market customization in building trust. It also hints that African tech companies may need to rethink their funding strategies, emphasizing sustainability, regional understanding, and operational independence over global validation.

Conclusion: Jumia’s Crisis Is a Wake-Up Call

Jumia’s ongoing decline—amplified by Baillie Gifford’s exit—serves as a cautionary tale for both investors and African startups. While it pioneered Africa’s presence on Wall Street, it also exposed the dangers of overhyping and underdelivering. Jumia’s fall from grace offers valuable lessons: scaling in Africa requires more than ambition—it demands trust, transparency, and true alignment with local realities.

Still, all hope is not lost for the continent’s digital economy. Homegrown companies like Konga and Takealot are proving that with sound strategy and authentic connection to local markets, African e-commerce can thrive. Whether Jumia can recalibrate in time to reclaim its relevance remains uncertain, but its trajectory has undoubtedly reshaped the narrative of Africa’s digital ambitions.