Getting wahed of the curve... Wahed Invest just raised $25M for its Islamic investment platform, in a round led by Saudi Aramaco's venture capital arm. The NY-based fintech calls itself the world’s first halal robo adviser. Halal: permitted under the laws of the Quran, the religious text of Islam.
- Wahed identified a problem with the typical robo-adviser: Most investment firms will put money into large, market-tracking funds such as the S&P 500. Problem?
- Many companies are at odds with Sharia law because of the products they sell — for example: companies that sell alcohol, pork, tobacco, or gambling products.
- Since Sharia extends to all aspects of life, including money and finance, Wahed solves the barrier for Muslims by screening investments for Sharia-compliance.
- Interest too: Companies with excess debt are also excluded, since Shariah forbids Muslims from earning or paying interest.
Include Islamic finance in the wide world of Fintech... In its last financing round in 2018, Wahed was valued at $100M after raising $8M in seed funding. Since May 2019, Wahed has expanded from the US & UK to service over 100K clients across 130 countries. Last October it launched in Malaysia, a country governed by Sharia law.
This could be a big customized market opportunity... And Wahed isn't the only Islamic fintech trying to cater to the world's 2B Muslims. In an industry in which customizing to consumer needs is key, these companies could expand quick — especially in Sharia-governed countries like Saudi Arabia. But they'll still face massive competition from traditional banks.