Start-ups in Jordan have attracted growing investments from 2018 to 2022, as the kingdom works to position itself as a regional leader in technology, a new study has shown.
The country is now the fourth most funded and transacted market in Mena, attracting about $246 million of capital across 220 deals since 2018, start-up data platform Magnitt said.
The UAE, Saudi Arabia and Egypt are the three biggest markets for VC capital, having attracted $4.48 billion, $1.94 billion and $1.46 billion respectively during that period, it said.
In terms of deals, Jordan was also fourth with 220, behind the UAE (754), Egypt (707) and Saudi Arabia (525).
Funding in Jordan surged by a compound annual growth rate of 13 per cent, while the number of deals, which increased 9 per cent, is largely in line with Saudi Arabia and Egypt, Magnitt said.
While other Mena markets have focused on the fast-growing financial technology market, Jordanian start-ups have leaned more into another big-ticket sector, e-commerce and retail, which Magnitt has combined into one vertical.
The sector attracted $50 million in funding from 2018 to 2022, which is a fifth of all investments, the report said.
It was followed by education technology ($38 million), health care ($37 million), media and entertainment ($29 million), and FinTech ($26 million).
E-commerce and retail also topped in the number of deals with 38, accounting for 17 per cent of all transactions, Magnitt said. FinTech and health care (26 per cent), enterprise software (20) and education technology (16) were the next biggest sectors.
The kingdom is also working to attract more investors into its technology ecosystem, as it seeks to position the country as a “regional leader in innovation, technology and entrepreneurship”, Ahmad Hanandeh, the kingdom's Minister of Digital Economy and Entrepreneurship, wrote in the report.
“Jordan remains committed to fostering an enabling environment for entrepreneurship and innovation. We continue to implement policies and initiatives aimed at attracting investment, supporting start-ups and creating jobs … the venture investment sector has been a key driver of this transformation.”
Start-ups in Mena continue to attract funding from both local and international investors as the ecosystem expands, with these companies working to address challenges and market gaps by developing new solutions and services.
Venture funding in Mena jumped 32 per cent on a quarterly basis to $250 million in the third quarter driven by a sharp rise in early-stage investments in the region, despite the number of deals flat at 78, Magnitt said in its quarterly update last month.
During the three months ended September, Jordan attracted $23 million in funding, which was 40 per cent down year-on-year, it said.
In 2022, the kingdom recorded a decline in VC activity with funding down by two thirds annually, compared to 42 per cent in Mena, Magnitt data said. Deal flow fell by a quarter, which was better than Mena's 49 per cent.
Despite this, Jordan remains among one of Mena's fastest-growing VC ecosystems; in 2021, it raised over $120 million across 53 deals, which was a record high for the country, Magnitt data shows.
“No doubt that Jordan is a hotbed of potential … but when it comes to trends, Jordan likes to do things a little differently. While the rest of Mena is buzzing with FinTech fever, Jordan's e-commerce/retail sector is stealing the spotlight,” said Philip Bahoshy, chief executive of Magnitt.
“Some of the country’s most well-funded start-ups, including Liwwa and Eon Dental, have received funding from international investors like 500 Global and Endeavor Catalyst.”