The Co-Founders of Nigeria’s retail online giant Jumia Raphael Afeador and Tunde Kehinde recently left the company to the surprise of many analysts and keen followers of the online business. They only not resigned but also completely divested from the company they launched in just under 2 years. Whilst it hasn’t been publicly stated why they left precisely it may not be unconnected with the huge capital inflows from Venture Capital firms as this interesting article in The Nation suggest.
In order for the Jumia co-founders, to increase market share and sustain its leadership position against growing competition in Nigeria’s rising e-commerce market, bringing venture capital appears to have become the option. This option necessitated the founders’ exit to build a new brand. Experts are wondering what could have pushed founders of such high networth company to sell the brand to African Internet Holding, which is owned by a controversial German e-commerce cloning king.
The total global investment in Jumia later saw MTN, Rocket Internet and Millicom International Cellular acquire 33.3 per cent equity each in Africa Internet Holding, a partnership that will expand MTN online retail and other essential digital services on the African continent.
With the influx of new and sophisticated investors, I am hence not surprised about their decision to completely divest. Huge capital inflows from VC’s may have had the effect of diluting them out of contention and competition for influence and decision making within the board. Sadly though, by leaving Jumia, the two guys have not only left a multimillion dollar company they both formed, they also have now parted ways completely. The article also quoted Kehinde as saying;
We have left Jumia going to a month now and we no longer own a stake in the company. Afeador and I have also parted ways but a time will come when I will talk about my new business, a logistics management company. For now, everyone will do his businesses separately,
Let’s just hope they each come up with something even more exciting than Jumia. An example, is one of the founders of PayPal, Elon Musk, who went on to form Tesla Motors and pioneering the business of commercializing the transport of humans to space.
Read the article on The Nation here