Tech

E-commerce beats fintech to Jordan VC funding top spot

By Pramod Kumar

November 20, 2023, 8:21 AM

E-commerce accounts for a comparatively small amount of sales in Jordan, but the sector is attracting venture capital funding

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The e-commerce sector accounts for the biggest share of Jordan’s venture capital funding, bucking the dominance of fintechs across the wider Middle East and North Africa (Mena) region.

E-commerce/retail has attracted 20 percent of Jordan’s total funding, and 17 percent of deals, between 2018 and 2022, according to a report by Jordan’s Ministry of Digital Economy and Entrepreneurship and Dubai-based research company Magnitt.

Over the five-year period, e-commerce and retail generated $50 million in funding in Jordan, followed by education tech ($38 million and 16 percent), health technology ($37 million and 15 percent) and media and entertainment ($29 million and 12 percent).

Fintech, which includes money transfer apps and digital banks, came in fifth with $26 million and a tenth of all funding in Jordan.

Fintech dominance

This is in contrast to the wider Mena region, where venture capital firm Wamda reported that the fintech sector accounted for 41 percent of the $1.6 billion total funding in the first half of 2023.

Ecommerce attracted only 12 percent of funding across the same period.

“What makes Jordan’s story compelling is its departure from the norm,” Philip Bahoshy, founder and CEO of Magnitt, told AGBI.

“While fintech usually takes centre stage across Mena markets, Jordan’s venture landscape is driven by the thriving e-commerce sector.

“The industry leads the charts by capital and by transactions, something not seen in most of the other emerging venture markets.”

Revenue in Jordan’s e-commerce sector is set to reach $226 million this year, and grow at an annual rate of 6.8 percent to reach $294 million by 2027, according to a report by German research company ECDB.

The sector is still considered quite small and has a lot of growth potential. Online sales account for only 9.1 percent of total retail sales in Jordan, compared with around 13.8 percent in the UAE.

Between 2018 and 2022, total funding in Jordan has risen by 13 percent, peaking in 2021 with 53 deals worth a total of $121 million.

Figures for the first six months of 2023 showed there were 16 deals worth $13 million, compared with 24 deals worth $17 million in the first half of last year.

Jordan is the fourth most-funded country in the Mena region, although it captured just 3 percent of the total funding between 2018 and 2022.

The UAE dominated with 49 percent ($4.48 billion), followed by Saudi Arabia ($1.94 billion and 21 percent) and Egypt ($1.46 billion and 16 percent).