IT Financing

The two main sources of financing for IT firms is Foreign Direct investment and Venture Capital.

Foreign Direct Investment (FDI): 

    Total FDI in 2001: $58.7 million

    Foreign Direct Investment is perhaps one of the vital sources of financing for Jordanian IT firms.  The following are examples taken from Reach 2.0 document of FDI in Jordan: [18]

  1. Cisco Systems - invested $1 million in the EFG-Hermes Venture Capital Fund.  Cisco also developed a Networking Academics program which teaches people how to build and maintain Internet networking systems.[18]

  2.  Maktoob - "Maktoob is the first Arabic web-based email solution on the Internet. Launched by the Jordanian firm, Business Optimization Consultants (B.O.C) in October 1998, Maktoob is rapidly becoming one of the major Arab virtual communities on the Internet. New and innovative services are continuously being introduced to spread the use of the Arabic language on the Internet and to make it easier for Arabic users to communicate. Maktoob has attracted $2 million in investment from the EFG-Hermes VentureCapital Fund".[18]

  3. NETS and Firstnet FTG - "Bahrain Telecomm (Batelco) has formed Batelco Jordan, purchasing 51% of the ISPs, NETS and Firstnet, and merging them into one. The value of this deal is estimated at $13.9 million."[18]

  4. Al Bawaba – raised $5.15 in funding.[18]

  5. Arabia.com - "Arabia.com has created 80 new jobs and accumulated $9 million in Foreign Direct  Investment. A leading Internet company in the Arab World, Arabia.com has been operating since 1995.  Arabia.com’s portal combines world-class search, content and other services and is regarded as the leading Arab world site on the Internet." [18]

  6.  Menafn.com – raised $1.5 million in investment.[18]

  7. Info2Cell.com - "Info2Cell provides mobile phone information services through Wireless Application Protocol (WAP) and has attracted $4 million in investment from Italy’s Acotel."[18]

  8. UNEXT.com- "This Internet education company delivering graduate-level academic programming on-line visited Jordan in July 2000 and committed to investing $10 million in Jordan over the next 10 years."[18]

Venture Capital:

  1. EFG-Hermes - "Egypt’s EFG-Hermes (owned 20% by Citigroup), is establishing a $15 million Jordan IT Venture Capital Fund to encourage investment in promising small Information Technology companies. ($1 million in funds come from Cisco Systems, $1 million from Norway, $4 million from the European Investment Bank, with the remainder coming from Arab investors)."[18]

    2.

  2. Crescent Venture Partners with Export and Finance Bank - The fund is worth #30 million and is based in Amman.  It is expected to invest in 15 Internet and IT firms in the Middle East region.  It will provide incubation services to these firms in addition to cash investments.[18]

  3. Foursan- "Foursan Technology Partners ("4san") is a Jordanian venture capital firm focused on non publicly traded startups and emerging IT ventures in the Middle East and North Africa region".[18] The fund is currently investing in OneWorld Software and a future joint venture with Fajitsu Systems will be headquartered in Jordan.  The new company, called 4Mena, " will provide corporate clients in the MENA region with customized E-business applications and integrated solutions."[18]

  4. Jordan Technology Group - "The European Investment Bank and JordInvest both signed share subscription agreements to invest 2.9 million in this VC company targeting IT start-ups."[18]

Number of Jordanian IT companies on London or New York stock exchange: 0

Future Plans for financing IT firms: There are future plans to establishing a regional IT stock market for listing and trading IT companies.  The new Regional IT Board will provide means for IT companies in Jordan, Dubai and Bahrain to access capital for growth. " It will also provide venture capital firms that invest in IT companies with an exit mechanism for realizing their investment."[18]