Saudi Aramco Entrepreneurship Ventures, the venture capital arm of the state-owned oil giant also known as Wa'ed Ventures, led a $25 million (Dh91.8m) funding round into FinTech platform Wahed.
Wahed is a roboadvisory platform offering Sharia-compliant investments to Muslim investors, which was set up by chief executive Junaid Wahedna in New York in 2015. It first onboarded clients in London in 2017 and has since established entities in Mauritius, Kazakhstan and in Dubai. The latest funding round also included participation from existing investors Beco Capital and CueBall Capital, as well as Dubai Cultiv8 and Kuwait's Rasameel.
The money will be used to fuel the company’s global expansion and develop a new subsidiary in Saudi Arabia that will serve as its regional hub. The company was recently granted the first roboadvisory permit issued by the kingdom's financial regulator, the Capital Markets Authority (CMA), to roll out its platform.
"We’re excited to have the support of Aramco Ventures as we foray into the Saudi market. We consider Aramco a strategic long-term partner in both the kingdom and the rest of the world,” Mr Wahedna said.
Wahed, which previously raised $8m in a Series A funding round in October 2018 and $7m in 2017, has tapped into a growing demand for Islamic and ethical investments, which are available through its mobile app. The company serves more than 100,000 clients globally and its growth plans involve targeting some of the biggest Muslim populations in markets such as Indonesia, Nigeria, India and the Commonwealth of Independent States, the company said in a statement.
"We believe in Wahed’s mission to provide ethical investing. The company has taken the lead in delivering investment services to one of the world’s fastest growing sectors – Islamic Finance," said Wassim Basrawi, managing director at Wa’ed Ventures. "This latest funding round will enable Wahed to make Saudi their regional Mena hub and contribute towards a fast-growing FinTech ecosystem.”
The Islamic banking market in Saudi Arabia grew to $309bn by September 30 last year, up from $296bn in December 2018, ratings agency Moody's Investors Service said in a report issued in March this year.
“We expect Islamic finance penetration in Saudi Arabia to increase to 80 per cent of system-wide loans (including both conventional and Islamic financing assets) over the next 12-18 months, from 77 per cent in 2018, driven by increased demand from both corporate and retail clients," the report said.