Friday, May 20, 2022
Editor's PickIslamic crypto asset-related start-ups capturing attention of global investors

Islamic crypto asset-related start-ups capturing attention of global investors

Investors — both conventional and Islamic — are warming up to Halal crypto-based projects as evident by more related Shariah fintech start-ups winning investments, a sign that is likely to be a boon for the Islamic fintech sector.

Fasset Exchange is the latest in a string of Islamic crypto-focused start-ups to successfully close investment rounds. It confirmed this week that it secured US$22 million in Series A funding, led by New York-based Liberty City Ventures and Pakistan’s Fatima Gobi Ventures. New York’s Soma Capital and Singapore-based MyAsiaVC participated in the round.

Founded by Islamic and ethical finance advocate Mohammad Raafi Hossain, who once was an advisor to the UAE’s Prime Minister’s Office, Fasset has a Halal focus. The digital assets platform, which was admitted to the Central Bank of Bahrain’s regulatory sandbox in 2020, intends to utilize the funding to develop its ethical product suite as well as expand into new Muslim-majority jurisdictions, particularly Pakistan and Indonesia. The round comes on the heels of the platform obtaining authorization to operate in the EU.

Fasset’s aggressive geographical expansion began last year, when it procured approvals from Malaysia’s Labuan Financial Services Authority to offer digital asset services from the offshore center. That marked the Middle Eastern start-up’s first international expansion outside of the region.

Islamic blockchain and Halal crypto start-ups are gaining traction among investors. Australia-based Marhaba DeFi earlier this year raised some US$5.5 million while Bahrain-licensed cryptocurrency exchange Rain closed a US$110 million Series B funding round, co-led by Silicon Valley’s Paradigm and Kleiner Perkins with participation from the likes of Coinbase Ventures, Global Founders Capital, MEVP, Cadenza Ventures, JIMCO and CMT Digital, among others.

While these start-ups are gaining the attention of venture capitalists familiar with the Halal market such as MEVP and Gobi Ventures, it is interesting to note that they have also captured the attention of sector-agnostic firms, including first-time Islamic fintech investors. Industry participants see this as an increasing validation of Shariah compliant digital financial services.

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