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Venture Capital in the Middle East and North Africa Report7VC in levantWalid Hanna, Middle East Venture Partners (MEVP)The Levant is witnessing improving investment conditions and a growing interest in its markets. Increasingly, VC isbecoming a viable regional asset class. Jordan and Lebanon are leading the sector with their growing VC ecosystems.The public sector is also recognizing the importance of VC within the economy and is mulling its future policies andtheir likely effect on the industry.Entrepreneurship: The region is set to benefit from its wealth of ICT-specialized human capital. The younger generationis increasingly more entrepreneurial. Although some are ‘copy cats’, the ripple effect of this currently small waveof entrepreneurship will have a positive impact in the long run.Venture Capital: VC firms have an increasing number of challenges to overcome. One is to uphold the deploymentof funds in quality deals. Another is to develop successful exits and realize expected returns in nascent M&A market.Regulatory structures and the improvement of the legal framework in the region are further challenges to be addressedby this emerging industry.The VC concept is little known to start-ups as demonstrated by entrepreneurs’ low levels of preparation when theyreach out to VC firms for funding. They usually display little understanding of the commitments they are asked totake as well as unclear understanding of the value they extract from such a partnership. VCs have, therefore, a cleareducational role.While still almost a green field, VC has existed in the Levant for some time. However, it has only become active in thepast couple of years. Intel Capital and Abraaj Capital’s Riyada Enterprise Development Funds are the largest fundsactive in the region with Riyada Enterprise Development (an SME growth capital investment firm) having dedicatedfunds for Jordan, Lebanon and Palestine. Other companies in Jordan include: Accelerator Technology Holding, InteractiveVenture (IV) Holdings (regional funds based in Jordan); and in Lebanon: Berytech Fund, Middle East VenturePartners (MEVP).JordanAdey Salamin, Riyada Enterprise DevelopmentEntrepreneurship: Jordan is home to a number of successful start-ups that have become household names regionallyand that have become success stories shared among the youth and would-be entrepreneurs. A new culture of ‘Ican do it too’ is being born in Jordan as a result of the role models created. Major success stories include: Aramex,Maktoob, Pharmacy One, Hikma Pharmaceuticals, Nuqul Group, Rubicon, Iris Guard, and many more.Armed with a couple of entrepreneurial success stories while running a country with limited resources and a highunemployment rate, the Government of Jordan was eager to promote high profile youth entrepreneurship programs.YEA (Young Entrepreneurs Association) and INJAZ (Economic Opportunities for Jordanian Youth Program)were among the first initiatives aimed at young people to get them involved in Jordan’s private sector.King Abudllah II has championed the cause of Jordanian entrepreneurs and the potential of private sector involvement.A group of progressive entrepreneurs, investors and leading Jordanian figures set up Oasis 500, a program toincubate, train future entrepreneurs and seed over 500 start-ups. Oasis 500 is currently led by Dr. Ussama Fayyad,ex-Chief Data Officer at Yahoo!, who is confident that Jordan has a tech-savvy core community keen on developingideas in cyberspace and new technology.10
Venture Capital in the Middle East and North Africa ReportVenture capital: The VC and growth capital investment industry in Jordan is still in the early stages of development.Within the growth capital funding category, efforts are currently led by Riyada Enterprise Development, an AbraajCapital fund focusing on entrepreneurially-run and innovative SME businesses that are scalable into new regionalmarkets and that can leverage technology to support their work. IV Holdings, a subsidiary of Accelerator TechnologyHoldings led by Emile Cubeisy, focuses on investments in the internet, mobile and interactive companies’ space.The Angel Investment space within Jordan has been more active in the past couple of years and specifically led byindividuals such as Fadi Ghandour and Maher Qaddura among others. One of many challenges facing Angel Investorsand entrepreneurs was how to find or connect with each other. These challenges recently prompted Oasis 500to launch the first organized Angel Investment Network and Event to promote its first six Jordanian start-ups to over150 local and regional Angel Investors. The event was a great success with each demonstrated start-up getting atleast a couple of serious investors interested and currently evaluating the potential to invest.Business plan competitions are being proposed and launched. These competitions are creating awareness in theinvestor community that there is a flow of entrepreneurial ideas and energy. There is a realization that a huge gapexists in the entrepreneurship ecosystem. The solution is not in ideas or programs, but in a will to turn ideas intosuccesses. The seeds for kick-starting the efforts of fostering a more nurturing and practical ecosystem for entrepreneurshipin Jordan are just germinating. It’s time to become an entrepreneur!Feroz Sanaulla, Intel Capital points out that Jordan is at the forefront of content and consumer technologies in MENA“In terms of consumer orientated technology, Jordan is where the action is – especially scaleable Arabic contentgeneration and ecommerce”.Organizations that support the entrepreneurial ecosystem in Jordan include:»»Endeavor Jordan: Launched in 2009 to support high-impact entrepreneurship in the country, it hasalready selected 18 entrepreneurs from high-growth Jordanian start-ups including Think Arabia,Jeeran, Akhtaboot, CADER, among others.»»The Queen Rania Center for Entrepreneurship (QRCE): A not-for-profit, non-governmental organizationwhich works towards improving national development, and aims to be the region’s cornerstone fortechnology commercialization and entrepreneurship advancement. The QRCE hosts the Google Award forthe Best Online Business in Jordan, in addition to the Queen Rania Entrepreneurship Competition.Endeavor Jordan, The Queen Rania Center for Entrepreneurship, and the Young Entrepreneurs Associationhave collaboratively put together the Global Entrepreneurship Week event in Jordan. The goal of GlobalEntrepreneurship Week is to inspire young people to embrace innovation, imagination and creativity, andto encourage entrepreneurship around the globe. The organizers have focused especially on positioningJordan as a regional hub of innovation and a leader in entrepreneurial activity.»Business Development Centre (BDC):» Formed in 2005 to provide management training, functionalsupport, and coalition building opportunities to encourage the growth of SMEs and the development ofentrepreneurial capacity within Jordan.11
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