A unit of Saudi Arabia’s $400 billion Public Investment Fund has led a new financing round for OpenSooq.com, a Jordan-based online classifieds business that’s looking to triple its headcount across the Middle East.
The Saudi Jordanian Investment Fund, a $3 billion entity created by the Saudi wealth fund and a group of Jordanian banks, is backing OpenSooq along with existing investors iMENA Group and FJLabs — founded by Fabrice Grinda, who was an early investor in Alibaba Group Holding Ltd.
OpenSooq, whose biggest markets are Jordan and Saudi Arabia, said it raised $24 million. The company’s chairman, Khaldoon Tabaza, declined to comment on OpenSooq’s valuation.
Founded in 2008 by Libyan American entrepreneur Salah Al Sharif, OpenSooq is involved in the sale of about $30 billion of goods a year, with an item sold through the company every 13 seconds. After iMENA invested in 2012, the company moved its headquarters to Jordan and began expanding into new countries. It’s now in 19 countries across the Middle East, from the Levant to the tip of the Arabian Peninsula.
“OpenSooq has touched and improved the lives of more people in its key markets that any other mobile application, bringing real utility to every day needs,” Tabaza said.
Saudi Arabia has used the joint investment platform to shore up the economy of Jordan, a fellow Arab monarchy that two months ago said it uncovered a plot to destabilize the country.
Jordan, which shares a border with Saudi Arabia, has for decades relied on aid from the U.S. and oil-rich Gulf nations, but has struggled after the influx of Iraqi and Syrian refugees further strained its finances.
The OpenSooq deal is one of the first in the technology industry by the Saudi Jordanian Investment Fund.
Its first major investment in Jordan was a 500 million-dinar ($705 million) agreement, signed in 2019 jointly with the Aqaba Special Economic Zone Authority, to establish, develop and manage a railway. A Saudi official has called it the largest-ever project between the two countries. The fund has also approved a contract to build a hospital and a medical university for $400 million.
The Saudi wealth fund, known as PIF, and its subsidiaries have made backing promising technology companies in the Middle East and beyond a priority as the kingdom tries to finance a shift away from oil sales as the main driver of the Saudi economy.
The PIF created a $1 billion venture capital fund of funds called Jada, and has also backed Noon.com, a regional rival to Amazon.com Inc. Sanabil, another unit of the PIF, last year led a $35 million funding round for SellAnyCar.com, the Dubai-based online car trader.
The Middle East has been slower to adapt to e-commerce than other regions, although lockdowns to combat the coronavirus pandemic last year have accelerated the shift to online shopping and food delivery.
A series of landmark deals such as Amazon’s acquisition of e-commerce platform Souq.com and the sale of ride-hailing app Careem to Uber Technologies Inc. has led to a wave of investments in tech firms in the region.
As Middle Eastern technology companies continue to grow, they will increasingly look to either list on regional stock markets or become acquisition targets for global tech firms, according to Tabaza, OpenSooq’s chairman who’s also founder and managing director of iMENA Group.