This Startup Story is featured through KrASIA’s partnership with the TaqwaTech startup competition.
IslamicMarkets wants to solve one key issue of the Islamic economy: its fragmentation and lack of standards.
“We create a platform that basically provides infrastructure for the Islamic economy and this platform has been developing organically by people who believe in this industry,” Shakeeb Saqlain, the CEO of IslamicMarkets, told KrASIA.
The site offers financial intelligence, e-learning, and investment opportunities that serve the Islamic economy worldwide. The content consists of articles, publications, tailor-made training materials, reports, and advisories for paying clients. However, according to Saqlain, Islamicmarkets’ core offering is “IslamicMarkets Enterprise” which provides institutional clients access to market intelligence (IslamicMarkets IQ) and e-learning platform (IslamicMarkets Learning).
The platform has over 15,000 reports and papers in its library covering Islamic market data and trends in the Islamic bond markets, according to Saqlain.
Founded in London in 2015, the company is driven by a team of people who have deep experience on the ground of Islamic finance. Saqlain has worked in the financial service industry for over a decade, including at Morgan Stanley and the Dubai Islamic Bank before developing the platform. CTO Javaid Karim is a veteran fintech developer with over 25 years of experience, with senior roles at BNP Paribas and Fidelity Investment, where he developed a global web portal and data distribution tool.
IslamicMarkets’ advisory board consists of experts in Islamic economy, including Daud Vicary, a former president and the CEO of International Centre for Education in Islamic Finance (INCEIF) and Yasmin Mahmood, former CEO of Malaysia’s Digital Economic Corporation (MDEC).
In March 2019, the startup raised an undisclosed amount of corporate round by London-based merchant banking and investment firm New World Capital Advisors.
After winning the TaqwaTech startup competition in Kuala Lumpur this month in a victory that landed it a USD 1 million investment led by Gobi Partners, IslamicMarkets plans to bring the product to Indonesia. In Southeast Asia, it already has presences in Malaysia and Brunei.
Difficulties to scale in the Islamic Economy
Saqlain said that, although there is much activity on the ground of Islamic economy, especially in the countries where Muslims dominate the population, it can be difficult for a business to scale up and have a real impact. That’s because these markets are so fragmented and difficult to address as a whole. Many investors would rather put their money elsewhere.
Indonesia, with its massive population, represents the biggest potential Islamic market, but its neighbor Malaysia is growing faster, especially with its more established shariah-compliant finance sector, Saqlain explained. Besides these two Southeast Asian countries, he sees Saudi Arabia and Turkey as two other important countries for business. The UK is also promising because the country has many institutions that can support the Islamic economy.
The platform revolves around the ambitious idea to counter that fragmentation and to help individual efforts succeed by linking them up with the right information, people, and potential investments. The idea is to harmonize standards in different countries so that entities within these markets can collaborate more closely.
One problem Saqlain observed is that Islamic institutions are often at a disadvantage from the start because the playing field isn’t even. “Most of regulation, taxation structure, and the legal structure support conventional players without having a clear framework for its shariah counterparts,” said Saqlain. That’s why, he thinks, Islamic finance institutions have a hard time securing a foothold.
Moreover, there is no international shariah council that regulates the ins and outs of the Islamic economic industry, which complicates international commerce activities. If you want to sell Indonesian sharia products in Turkey, chances are you’ll face challenges and many questions from the local authorities because shariah regulations in Turkey might be different from those in Indonesia, he explained.
Three billion people
IslamicMarkets currently has over 250,000 users and is growing at 300% per year, according to Saqlain. Half of the users are from Southeast Asia, the region with the biggest Muslim population in the world. He wants to reach at least one million users next year.
The platform has an advisory team that works closely with firms, governments, and institutions to provide consultancy services in relation to the establishment, promotion, and regulation of Islamic finance and fintech markets. IslamicMarkets’ paying subscribers consist of enterprises and institutions all over the world, especially in Southeast Asia, the Middle East, and in Europe. “The customers leverage our infrastructures to help them build new products faster and more conveniently,” Saqlain said.
Gobi Partners, now IslamicMarkets’ investor, hosted the TaqwaTech competition, as part of its awareness of the Islamic economy’s growth potential and the role digital platforms will play in it.
The Pew Research Center estimated that there were approximately 1.8 billion Muslims worldwide in 2015 and the number will increase to nearly three billion by 2060. In all, Muslims spent an estimated USD 2.1 trillion in 2017. On the other hand, the Muslim market saw only USD 745 million in disclosed private equity (PE) investment over three years, far less than the almost USD 595 billion in PE and VC investments globally in 2017, signaling that this is an untapped opportunity.