Pan-Asian venture capital firm Gobi Partners has teamed up with social finance platform operator Ethis Group to launch a $20-million fund that will invest in Shariah-compliant startups, according to an announcement.
The Shariah-compliant seed fund is targeted to make a first close by the end of this year. It marks Ethis Group’s first foray into the VC space and Gobi’s first fully Shariah-compliant fund.
According to the announcement, the fund will seek to capture the growth of startups in the Halal economy, where startups adhere to Shariah law, and thus their products are built to serve a large Muslim community.
The fund will focus on startups globally, starting with those in the MENA and Southeast Asia regions. Ethis Group operates crowd-investment platforms approved by regulators in Indonesia, Malaysia and Oman.
In a joint statement, Gobi and Ethis said the Shariah-compliant fund will benefit from the network of startups and scaleups accessible by Gobi Partners and Ethis, which has a deep relationship with the Halal economy and impact-investment space.
The world halal economy, which was at $4 trillion in 2017, has touched $7 trillion in 2021, Turkey Vice-President Fuat Oktay said at the 7th World Halal Summit organised together with the 8th Organisation of Islamic Cooperation (OIC) Halal Summit last year.
“The establishment of this joint fund will allow us to channel investments into tech startups driving change and making an impact. Venture capital is in high demand and suitable for ethical investment,” said Mohamed Shehzad Bin Mohamed Islam, CEO of Ethis Investment Platform LLC.
Ethis said its platforms serve ordinary people, high-net-worth individuals, corporate and government entities. It built its initial track record from 2016 to 2020 in social housing in Indonesia, where its global community of investors from more than 50 countries funded development projects to build close to 10,000 homes.
Gobi Partners, on the other hand, supports entrepreneurs from the early to growth stages and focuses on emerging and underserved markets. It has raised 15 funds to date, invested in over 320 startups and nurtured nine unicorns.