What some take for granted, as a normal way of doing business, others find offensive and forbidden by an edict of religion. For 1.8 billion Muslims to enter the world of FinTech with a clear conscience, a new solution comes in the form of Wahed, a FinTech investment platform that just raised $25 million for Halal-approved financial products and services.
Wahed’s Halal-Approved Investment Platform
In a diverse world, one size does not fit all. Even as the West develops technologies expansive reach throughout the rest of the world, an important fact remains: other people have different perspectives. Fortunately, the financial industry has already devised such efforts through Socially Responsible Investing (SRI).
One of the latest SRI examples addresses the question of interest rates. In Islam, Sharia specifically, paying for and earning interest (riba/usury) is strictly forbidden. This applies to both individuals and institutions like banks. Given that the vast majority of financial institutions in the world charge interest, this poses quite a predicament for Muslims who wish to follow the tenets of their faith.
Acting as a robo advisor applied to the Islamic world, Wahed aims to bring Halal-aligned finance to Muslims all over the world, as an online platform. This not only relates to usury, but also de-linking all assets to activities such as gambling, pornography, alcohol, tobacco, and firearms. In essence, Wahed facilitates Islamic ethical and social governance (ESG) prerequisites.
Wahed’s funding round was successfully completed at $25 million thanks to the following investors:
- Saudi Aramco Entrepreneurship Ventures (Wa’ed Ventures).
- BECO Capital
- Cue Ball Capital
- Dubai Cultiv8
Wahed as Extension of Saudi Arabia
According to a 2017 ICD-Reuters report, Islamic finance, across over 1400 institutions, drives $2.2 trillion worth of assets. In two years, by 2022, this number is expected to rise to approximately $3.8 trillion. This leaves plenty of space open for financial services and products aligned with Islamic values.
Given these figures and according to Junaid Wahedna, Group CEO of Wahed who founded the company in 2017, Wahed is a highly-sought commodity in the MENA region and beyond. Moreover, as young Muslims grow up completely immersed in digital media, Wahed’s rapid growth prospects are almost guaranteed. Thus far, Wahed was granted a Robo Advisory permit to operate freely in the UK and fast-modernizing Saudi Arabia.
This funding strategy aligns with Saudi Arabia’s Vision 2030 agenda in an effort to move away from oil dependence and extend its reach into Islam-approved investment that links the three continents – Africa, Europe, and Asia.
Canada-based robo advisor Wealthsimple also offers halal investing.
What do you think about Wahed’s $25 million in funding? We’d like to know what you think in the comments section below.