Ethical investment and social finance platform operator, Ethis Group, having launched EthisX as part of its global expansion plan, continues to trail blaze by collaborating with pan-Asian venture capital firm, Gobi Partners, to structure and set up a US$20 million Shariah-compliant seed fund.
The Fund, which is targeted to have its first closing by the end of this year, is notable for being Ethis Group’s first move into the venture fund space as well as Gobi Partners’ first-ever fully Shariah-compliant fund.
This collaboration combines the venture guiding acumen of Gobi Partners which currently has US$1.5 billion of assets under management across North Asia, South Asia and ASEAN, with Ethis Group’s growing group of fintech investment and crowdfunding platforms in Indonesia, Malaysia and most recently Oman. The Fund will benefit from the network of start-ups and scale-ups accessible by Gobi Partners, a prominent name in Asia, and Ethis with its deep relationships in the Halal economy and impact-investment space.
The partnership is aimed at capturing 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 geographic presence of Gobi and Ethis in markets with large Muslim populations bode well for the joint fund to invest in these startups. Furthermore, the fund’s focus on the broader ethical investment agenda resonates well with the post-pandemic emphasis on Environmental, Social, Governance and sustainable investments that also stretch beyond the Muslim community.
“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, Chief Executive Officer of Ethis Investment Platform LLC (EIP).
Founded in 2002, Gobi Partners which is now headquartered in Kuala Lumpur and Hong Kong, supports entrepreneurs from the early to growth stages and focuses on emerging and underserved markets. Gobi has raised 15 funds to date, invested in over 320 startups and nurtured nine unicorns. The latter includes Malaysia’s first unicorn, car e-commerce marketplace Carsome, and British-Hong Kong biotech startup Prenetics.
In 2016, Gobi launched its TaqwaTech vertical which focuses on investments in Islamic ventures and the global Muslim economy. Most notable of its TaqwaTech investments is Dubai-based Umrahme, which is now the global market leader in online Umrah pilgrimage bookings with over 3.5 million pilgrims since its inception in 2019.
“We are excited to partner with Ethis Group in creating this new Shariah-compliant Fund, which is very much in line with our existing TaqwaTech focus. Muslim consumers represent a US$2.2 trillion market opportunity, and the Muslim community is anticipated to make up more than 31% of the world’s population by 2060, however, the Muslim community’s digital needs are largely unmet or underserved. Through this partnership with Ethis and the creation of this dedicated Fund, we will now be able to fund, nurture and support even more Muslim entrepreneurs,” said Gobi cofounder, Thomas Tsao.
Once launched, the joint Fund will invest in Shariah-compliant startups globally with an initial geographic focus in the MENA as well as the ASEAN regions. EthisX’s presence in the Sultanate of Oman in particular is timely as it can have direct access to the growing investment opportunities supported by the Oman Vision 2040 which emphasised the diversification of its economy, development of the fintech industry and digitisation efforts by the authorities.