UAE's baraka secures regulatory approval for online trading

The zero-commission investment app will offer investors access to more than 5,000 US-listed securities

DUBAI, UNITED ARAB EMIRATES , March 17, 2021 – Feras Jalbout, founder and CEO of Baraka at his villa in Dubai. (Pawan Singh / The National) For Business. Story by Felicity Glover

Zero-commission investment platform baraka secured regulatory approval from the Dubai Financial Services Authority to operate in the UAE as it seeks to tap into the Middle East and North Africa's demand for online trading during the Covid-19 pandemic.

“Since we opened our wait-list in March, more than 10,000 users from across the Middle East have subscribed to be among the first to experience the baraka app, Feras Jalbout, founder and chief executive of baraka, said on Tuesday.

“This hasn’t just validated what we’re building, it’s shown us that there is a genuine need for a platform that offers regional retail investors insights and access to international markets.”

Retail investors are increasingly seeking direct access to markets with the help of technology, leading to a surge in popularity for zero-commission trading apps such as Robinhood, eToro, Interactive Brokers, Stashaway and Dubai’s Sarwa.

Demand for trading apps surged during the pandemic due to monetary easing by the US Federal Reserve and other central banks around the world, giving novice day traders more money to invest during pandemic lockdowns, according to a February report by US-based Finra Investor Education Foundation and the National Opinion Research Centre at the University of Chicago.

"Market dips that made stocks cheaper to buy and the ability to invest with small amounts were among the top reasons younger and inexperienced investors reported entering the stock market," the study, Investing 2020: New Accounts and the People Who Opened Them, said.

Founded in July last year, the baraka mobile app gives investors direct access to more than 5,000 US-listed securities, including stocks, exchange-traded funds and fractional shares with no minimum investment requirement.

Quote
The feedback we received during the beta testing phase has been invaluable in helping us fine-tune the platform to meet user needs
Feras Jalbout, founder and chief executive of baraka

The app, which is also available in Saudi Arabia, Bahrain, Oman and Kuwait, features a simplified dashboard for investors to monitor and track their portfolios, a content hub that includes daily market news and an investment academy for users to build and test their trading knowledge.

“The feedback we received during the beta testing phase has been invaluable in helping us fine-tune the platform to meet user needs,” Mr Jalbout said.

Baraka will also offer users the option of a paid tier that includes equity research by financial data company Refinitiv.

Initially bootstrapped with an investment of $150,000, baraka raised $1 million during its pre-seed round. It has since raised an additional $4m with investment from Global Founders Capital, FJ Labs, Raptor Group, Tribe Capital, Nuwa Capital, VentureSouq and Class 5 Global.

The funds will be used to enhance product features and expand baraka’s user base across the wider Mena region, Mr Jalbout said.

Baraka has also been accepted into the American seed money start-up accelerator Y-Combinator’s summer 2021 batch. The Silicon Valley start-up incubator provides early stage funding to selected applicants from around the world.

Updated: August 4th 2021, 4:20 AM
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