Cairo-based venture capital firm Flat6Labs is launching a new $20 million fund to support early stage start-ups in Jordan.
The Jordan Seed Fund (JSF) will support up to 90 start-ups over a period of five years, the venture capital firm said in a statement on Wednesday.
“Flat6Labs is well placed to support the aspirations of the kingdom’s talented entrepreneurs and help them take their businesses to the next level,” Ramez El Serafy, Flat6Labs chief executive, said. “We aim to support the growth and development of Jordan’s start-up ecosystem and thus contribute to a thriving national economy.”
The JSF has already attracted $7.4m worth of investment ahead of its first close from prominent backers such as the International Finance Corporation (IFC), the Innovative Startups and SMEs Fund (ISSF), Beyond Capital, Jordan’s Bank Al-Etihad, and GMS Ventures & Investments. A fund's final close typically takes place within a year of its first close.
Flat6Labs will also establish a seed programme to nurture the growth and development of promising start-ups in sectors such as information and communication technologies, software, healthcare, digital content and games, renewable energy, big data and FinTech, among others.
Each of the start-ups chosen for the programme will receive tailored support designed to help them scale and grow their businesses, with the long-term goal of creating regional and global champions, the statement said.
The companies chosen will have the opportunity to benefit from a cash seed investment of up to 50,000 Jordanian dinars ($70,521), with potential follow-on funding of up to 120,000 dinars.
“Jordan is an attractive market for entrepreneurship and early stage capital given its young and increasingly urban population, high rates of technology adoption and increasing government support,” Abdullah Jefri, IFC’s country manager for the Levant, said.
“Addressing the funding gaps will help build a robust start-up ecosystem to tap into this potential and spur innovation and economic growth in Jordan and the region.”
Venture capital companies have in recent months stepped up the funding of start-ups that intend to ease coronavirus-induced business challenges through the use of innovative technology.
Start-ups in the Mena region secured $1.03bn in funding last year, 13 per cent more than in 2019, according to data platform Magnitt.
“ISSF has been mandated to improve the Jordanian entrepreneurial ecosystem through acting as a fund of funds and through facilitating the creation of new funds to serve the investment needs of entrepreneurs and start-ups along their journey towards success,” Laith Al-Qassem, chief executive at ISSF, said.
“Flat6Labs fills an important gap and role by providing studied equity capital starting from seed stage accompanied by competent hands-on incubation and mentoring, which will facilitate speedier and more focused growth in the investments they make.”
Set up in 2011, Flat6Labs manages a number of seed funds with total assets under management of more than $85m.