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Jumia Technologies AG has jumped the most in about 20 months after a deal that will see UPS Inc. use the pan-African e-commerce company’s distribution network to expand on the continent.
Jumia’s U.S. certificates of deposit jumped 30% at 11:07 a.m. EDT on the New York Stock Exchange, the biggest gain since Aug. 3, 2020. The deal will see Atlanta-based UPS boost its presence in a number of African markets and benefit from an expected boom in online retail, said Renzo Bravo, head of strategy for the Indian subcontinent, Middle East and Africa.
“We believe Africa has the potential to reach approximately $180 billion in e-commerce by 2025,” Bravo said. “This will enable growth and trade, not only across Africa, but also from the continent to the world and from the world to Africa.”
For Jumia, the deal will allow the Berlin-based company to use UPS’s network in 220 countries and territories to help users deliver their packages, according to Apoorva Kumar, senior vice president of logistics. The collaboration will start in Nigeria, Morocco and Kenya, with the aim of adding other countries, he said.
The rally helped Jumia become a $1.2 billion company, up from $934.6 million on April 1. UPS shares fell 1.2%.
The companies did not provide financial terms of the deal.
Jumia was founded by French entrepreneurs Sacha Poignonnec and Jeremy Hodara in 2012 and has around 8 million customers. The group aims to take the lead in e-commerce in an increasingly connected continent, although challenges still include relatively low internet penetration and mapping difficulties, including in major cities like Lagos.
“Through Jumia’s logistics business, we have managed to build a fleet and delivery network on the mainland that has some value for an international courier giant like UPS,” Kumar said.
UPS and Jumia are still in discussions on projects such as rolling out co-branded pickup stations, they said.
UPS ranks #1 on the list of Top 100 For-Hire Carriers in North America.