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Goldman Sachs Invests in Africa’s ‘First Unicorn’

Online retailer Jumia is one of Africa Internet Group's most successful companies. Photograph by Pius Utomi Ekpei—AFP/Getty Images

Africa Internet Group (AIG), a Nigerian e-commerce group, has secured further funding worth a total of 225 million euros or $245 million from investors including Goldman Sachs, South African telecoms group MTN and Germany’s Rocket Internet, it said on Thursday.

AIG, which was founded in Nigeria in 2012, owns several technology companies that operate in 26 countries across the continent including online retailer Jumia, delivery app HelloFood, hotel booking platform Jovago and online real estate marketplace Lamudi.

Investors have been attracted by a growing demand for online products in more developed African markets in recent years and the prospect of larger disposable incomes among a growing middle class with burgeoning smartphone use making it easier to spend.

The additional investment by MTN, which bought a 33% stake in AIG in 2014, comes despite the current dispute with Nigeria over a demand it pay $3.9 billion in fines for failing to cut off unregistered SIM card users on its local mobile network.

In all the latest investments, which are additional to the 75 million euros that French insurer AXA said last month it was paying for an 8% stake, will take AIG’s capital up to 1 billion euros, company officials told Reuters. That valuation, equal to some $1.04 billion, has earned AIG the title of Africa’s “first unicorn.”

Goldman Sachs executive Jules Frebault said in a statement the investment bank had been “impressed by AIG’s pan-African operations.”

Despite the opportunities presented by the continent, the experience of those online can vary greatly according to internet speeds and network coverage which is reflected in online spending habits in Africa’s biggest economy, Nigeria.

A 2013 report by consultancy McKinsey suggested that only 1.5% of Nigeria’s nearly $500 billion economy took place online.

(Writing by Alexis Akwagyiram; Editing by Ulf Laessing and Greg Mahlich)