When little under-the-radar companies are compared to mega-corporations, it’s often little more than unfounded hype. That’s how I felt when I first started hearing Jumia Technologies (NYSE:JMIA) referred to as “the Amazon of Africa.”
Popular bullish theses rarely praise Jumia on the merits. They typically boil down to the following simplistic idea: Africa is a continent underserved by e-commerce. Amazon is an e-commerce company that’s been a great investment. Jumia is an e-commerce company in Africa. Therefore, Jumia will be a great investment.
The truth is, there have been legitimate reasons to not like Jumia in the past. But its most recent quarterly report caught my eye and caused me to reconsider the company. In short, Jumia just made a game-changing move.
The big problem
Jumia Technologies went public in April 2019 as a cash-burning machine. In the first quarter that year, it reported revenue…