Africa's e-commerce giant, Konga Online Shopping Limited, could be preparing its runway for a listing on the Nigerian Stock Exchange (NSE) within the next three years, news sources gather.
Working with global investment advisory firms, the largest
online shopping omnichannel platform in Nigeria could list its shares in an Initial
Public Offering (IPO) as early as 2027, according to experts familiar with the
matter.
Strong indications from the leadership of the company show
that deliberations are in place and while the details on the timing of the
launch could vary, the move to a publicly owned entity appears certain.
The new Konga which was founded in 2018 when Zinox Group
acquired it 100per cent from Africa’s largest tech global investors, Naspers
and Europe Kennivik, has grown through the years to become a major ecommerce player with more than 700
full time staff and over 100,000 indirect employees in its portfolio. The
acquisition by Zinox Group, a leading tech company, in 2018 was regarded as one
of the biggest buyouts of a mainstream ecommerce organisation on the African
continent at the time. The company has since positioned itself as a formidable
force in the ICT sector.
Speaking with this reporter on the possibility of a public
listing, an expert with a deep understanding of the dynamics in global capital
market as it relates to tech companies, Dr. Chris Uwaje, said: “Konga is a
company which must be watched closely as an organization with the potential to
disrupt the Nigerian stock market in 2027 if it hits the NSE as companies like
Amazon, Jumia struggle to survive in Africa because of infrastructural issues,
and are discouraged from meeting their ambitions in Africa.
“As the global economic storm hits Africa, and Nigeria in
particular, there are few companies which will emerge in the next five years
and Konga will break barriers if they hit the stock exchange, because these
guys' strategies and tactics are auditable.”
With Jumia's last quarter result showing reasonable stress
and Amazon withdrawing its expansion strategy for Africa, the path for Konga is
clear as the only ecommerce company that has everything within its business,
from online marketplace, fintech, hospitality and travels as well as global
brand partnerships, to own logistics nationwide. It will cost a fortune to
build such a consolidated group in Africa powered by very expensive technologies
and complicated analytics.
Konga, best known for its trusted delivery service, began
exploring the possibility of an IPO in early 2021, however it still operates as
a privately held entity with active institutional backing. The business is
valued at over $3billion considering its direct partnership with major global brands
Like Apple, L’Oreal (No.1 Cosmetics company in the world),
Starlink owned by Elon Musk’s Space X, Samsung, HP, Lenovo and others.
Akintunde Badmus, an investment banker based in New York
and Lagos, said: “Having spent time discussing with investment consultants in
Nigeria, I have come to the decision that Konga going on the Stock Exchange
will be a win for the country’s business landscape. The organisation's
framework is right for the Nigerian Stock Exchange and the fact that it is
committed to driving economic activity within the African subregion should be
encouraged.”
In many global markets, companies such as Konga acquire the
services of a special purpose acquisition company (SPAC), through which it
lists several businesses over three years. According to two people familiar
with the deal, this could be a path the ecommerce service provider may take.
A SPAC deal for Konga will be a significant test of
investor appetite for the Nigerian brand as the group undergoes various layers
of restructuring to position its portfolio of companies as major stakeholders
in corporate trade, fintech, hospitality and cosmetic distribution.
Despite facing global economic headwinds over the past
year, Konga has experienced a notable boost in its financial metrics. The
company benefits from the leadership of a team of young, yet seasoned
professionals, including Prince Nnamdi Ekeh, an MBA graduate from Saïd Business
School at Oxford University, known for their acumen and international business
expertise.
The Nigerian IPO sector worth an estimated N29 trillion is
gradually gaining momentum after months of market instability as major
manufacturing organizations grapple with tough economic realities.
If Konga succeeds with its entry into the stock market, it
will be the first locally owned majority stake ecommerce entity to achieve this
feat. Other companies such as Jumia have listed on the New York Stock Exchange
(NYSE) with its share value dwindling drastically at 10 per cent of its
original listing price.
Konga group may tell the true eCommerce story out of Africa
if all goes well.
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