Over the past few years, Jordan has emerged as a thriving hub for start-ups, with a significant uptick in investments from 2018 to 2022. This surge in funding has propelled the country to become the fourth most funded and transacted market in the Middle East and North Africa (MENA) region, according to a study conducted by start-up data platform Magnitt.
Investment Landscape
1. Position in MENA
Jordan has secured its position as a regional leader in technology, attracting approximately $246 million in capital through 220 deals since 2018. While the UAE, Saudi Arabia, and Egypt lead the charts in terms of venture capital (VC) capital, Jordan’s steady growth underscores its potential in the technology and innovation sector.
2. Growth Metrics
Funding in Jordan has seen a remarkable compound annual growth rate of 13%, aligning with the trajectory of major players in the region. The number of deals has also increased by 9%, showcasing a vibrant and expanding start-up ecosystem.
Sector Focus
1. E-commerce and Retail Dominance
Unlike other MENA markets that have heavily invested in the financial technology sector, Jordanian start-ups have carved a niche in e-commerce and retail. This sector has attracted $50 million in funding, comprising a fifth of all investments. With 38 deals, it also leads in transactional volume, constituting 17% of all deals.
2. Diversified Sectors
Jordan’s start-up landscape extends beyond e-commerce and retail, with substantial investments in education technology ($38 million), health care ($37 million), media and entertainment ($29 million), and FinTech ($26 million). This diversified portfolio reflects the dynamism of Jordan’s entrepreneurial spirit.
Government Initiatives
Ahmad Hanandeh, Jordan’s Minister of Digital Economy and Entrepreneurship, emphasizes the government’s commitment to fostering an enabling environment for entrepreneurship and innovation. The country is actively implementing policies and initiatives to attract investment, support start-ups, and create job opportunities.
Challenges and Opportunities
Despite a decline in VC activity in 2022, Jordan remains one of the fastest-growing VC ecosystems in the MENA region. While funding dropped by two-thirds annually, the country’s ability to maintain a relatively stable deal flow, down by only a quarter compared to the region’s 49%, demonstrates resilience and potential for future growth.
International Recognition
Some of Jordan’s most well-funded start-ups, such as Liwwa and Eon Dental, have garnered attention from international investors like 500 Global and Endeavor Catalyst. This recognition not only validates Jordan’s potential but also positions it on the global map of innovation and entrepreneurship.
As Jordan continues to position itself as a regional leader in innovation and technology, its start-up ecosystem remains a beacon of growth and opportunity. With a strategic focus on diverse sectors and government-backed initiatives, Jordan is poised to further elevate its status in the dynamic landscape of Middle Eastern entrepreneurship. Despite facing challenges, the resilience and unique approach of Jordan’s start-ups set the stage for a promising future in the world of innovation.
