Just like Tamatem Inc, POS Rocket also has a link to Maktoob. Its previous CEO, Samih Toukan was one of the first investors. Another common aspect is that both companies were both selected into Endeavour’s “Surge” program1 to help boost these high potential growth companies with the help of Ernst & Young.
Source: https://www.posrocket.com/
POS Rocket: Failure to Launch?
The Good
For a small country like Jordan, one can call the founder of POS Rocket as a serial entrepreneur. After his first job, Zeid Husban co-founded and launched in his own garage a food delivery service called ifood.jo which was later acquired2 in 2014.
After his successful exit, Zeid immediately founded another company POS Rocket in 2016 and in 2018 received a relatively high investment3 (compared to its peers in the country).
More details about the background can be found in the following podcast and cheat sheet from the London Conference.
In 2018 The company is already expanding in the region with new offices in Egypt and Kuwait. Everything seems to be working smoothly and doing great.
Source: https://data2.unhcr.org/en/documents/download/69605
So what could go wrong?
The Bad
`The first “bad” thing to note about the company is not really about its own product or service, but its target market. Had POS Rocket launched in a more developed market, demand for its products would have sky rocketed (or would’ve been beaten by more advanced and more sleek competitors). Just look at Twitter’s “sister company”, Square up financial records
Source: Square Up Investor Relations4
Basically POS Rocket is in a tough market. A lot of its customers have never used a point of sale system nor have they ever had an inventory management system. In the olden days (and with some shops today), products in small shops and retail stores would barely have a price tag on them and the price you pay would depend on your haggling skills. Little to no record of the transaction would be made (what’s a refund or a sales tax?). These were simpler times.
This is why POS Rocket’s main target in its home market is a niche of customers based only around West Amman. It’s targeted clients are also limited to small cake shops or restaurants as their system doesn’t allow depth/range in products.
The Ugly
The only ugly part of POS Rocket is again linked to its home market: Jordan. The country’s financial sector is still not well developed enough to accommodate for such a company that needs to grow at a rapid pace. The company won’t have easy access to credit via lending institutions where the prime lending rate is over 9% (unless the founder is suicidal and mortgages his own house, his family and dignity and risks going to jail).
The company doesn’t have easy access to funds via markets as there has been little to no new listings on the Amman Stock Exchange in the past decade and the process is in itself tedious enough to make the largest Jordanian Firms like Aramex (currently listed in Dubai) and Hikma Pharmaceuticals (listed in London) move abroad.
In terms of expansion, the company will need to either relocate or open an office in the GCC to allow for the free movement of its goods. And it can do so easily unlike the other fintech companies in Jordan.
If POS Rocket’s investors and founder wanted an exit, its best route would either be:
Acquisition or Merger by a foreign entity (just like ifood.jo)
Or via SPAC, an investment method proving very popular recently with Lebanese company Anghami and Egyptian company SWVL (SWVL in itself is an enigma on its own: with the announcement of the SPAC deal, the company was valued at $1.5 billion when it made only $22 million in revenue, which is less than 70x sales - the ride hailing business is the strangest to have propped up in the last few years with little to no profitability, suspicious accounting and strange legal practices in the world but this is not the point of this newsletter).
Conclusion
A common theme to most newsletters is the sad reality that a lot of companies in Jordan are not achieving their full potential and the reason is simply due to location.
POS Rocket in its own has a very special product/service that can be well integrated to more retailers. It can also expand by helping the retailers up sell their current inventory on the web (online store), help retailers gain customers with a rewards program (acquisition of Waafi for example?).
POS Rocket can even dream bigger: integrate its current products (CRM, inventory, POS) and add HR solutions, accounting & finance, tax reporting etc. It would be the perfect one-stop-shop for any start-up business.
The company has the potential to rocket to the moon.
https://www.endeavorjordan.org/surge
https://www.wamda.com/2014/11/yemeksepeti-gains-foothold-in-jordan-with-majority-stake-
https://www.entrepreneur.com/article/317975
https://s27.q4cdn.com/311240100/files/doc_financials/2021/q1/Q1-2021-Shareholder-Letter.pdf