Experts: Results of the Entrepreneurship Fund Exceed Financing to Build a Venture Capital Market
Jordan Expands Investment Base in Future Companies
Amman5 min read
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Economic experts agreed that the results of the first phase of the Jordanian Entrepreneurship Fund go beyond merely achieving targets, and represent a test of Jordan's ability to build a real venture capital market capable of attracting private investment and financing scalable companies.
They pointed out in interviews with «Al-Rai» that the importance of the experience lies in the fact that the fund did not only work as a source of financing, but also stimulated the private sector to invest in emerging and innovative companies, which face difficulty in accessing traditional bank financing, especially in their early stages.
The fund exceeded most of its targets, mobilizing about $109 million in private capital, against a target of $71.5 million, while 180 companies received funding, against a target of 150 companies. According to a review by the Independent Evaluation Group of the World Bank, the project achieved or exceeded all output indicators except one, and its overall result was classified as 'satisfactory'.
Economic expert Hossam Aaish said that the results of the fund represent the beginning of building a venture capital market in Jordan, explaining that the problem it addresses is not just a lack of financing, but also the gap facing innovative companies with high risks that do not have traditional guarantees.
Aaish pointed out that the private capital mobilized amounted to about $109 million against a target of nearly $71 million, while 180 companies benefited from financing against 150 targeted, in addition to 712 companies benefiting from investment readiness services. He pointed out that the project supported 2,624 full-time jobs, with an average wage of about 3.5 times the national average, reflecting the ability of emerging companies to create value-added jobs.
For his part, economic expert Wajih Makhamra said that the results of the fund showed a positive performance in mobilizing private capital and expanding the base of the entrepreneurial financing system, noting that the number of financial intermediaries benefiting reached 22 against a target of 10, and 712 companies benefited from investment readiness and business development services, and 317 beneficiaries of acceleration programs.
He added that positive indicators include the increase in the percentage of companies led by women to 26 percent, and companies led by young people to 43 percent, while 74 companies received early-stage financing against a target of 80 companies, which calls for greater focus on financing the early stages.
Makhamra stressed that the next phase must move from measuring the size of financing and the number of companies to measuring the impact of investments on growth, exports, job opportunities, attracting additional investments, and expanding outside the Jordanian market, considering that the first phase contributed to building the entrepreneurial financing system, while the challenge lies in turning emerging companies into scalable companies and expanding regionally and internationally.
Financial and economic expert Dr. Muhammad Al-Hadab Al-Sarhan confirmed that the most important value of the first phase lies in proving the ability of developmental financing to stimulate private capital, noting that the World Bank's financing of the project amounted to $50 million, while the private capital mobilized exceeded $108 million.
He explained that the number of fund managers working in Jordan increased from 5 to 17, and the number of financial intermediaries reached 22 against a target of 10, reflecting the emergence of a specialized financial structure around the entrepreneurship sector, not just injecting money into companies.
Al-Sarhan pointed out that the project supported 2,624 full-time jobs with an average wage of about 3.5 times the national average, explaining that the importance of this is linked to the creation of productive jobs with higher wages, especially in technology, services, and innovation.
He pointed out that private capital directed to early and seed stages amounted to about $55.7 million, against a target of $14.5 million, but the number of companies that received financing in these stages amounted to 74 companies against 80 targeted, making the expansion of the base of companies that reach the first investment one of the challenges of the next phase.
He added that the benefit of 712 companies from investment readiness and business development services, and 317 from acceleration programs, confirms the importance of combining financing with qualification, while three successful exits were recorded with a multiplier of 1.56 times the invested capital, highlighting the importance of developing exit paths and reinvestment of capital.
Al-Sarhan concluded that the first phase largely answered the question of Jordan's ability to attract private capital to the entrepreneurship sector, while the next challenge focuses on the ability of funded companies to grow and continue, increase their exports, create high-paying jobs, attract new financing rounds, and expand in regional and international markets. When this is achieved, the fund will transform from a program for financing emerging companies into a tool for building a sustainable venture capital industry in Jordan.
