Youth hungry for digital quality

According to Irfan Goandal, a global tech venture capitalist and partner in the Copenhagen-based Promentum Equity Partners, the young and urban Muslim community is a highly tech-savvy and well-connected segment across the globe.

“They are hungry for quality digital content and services across the board,” says Mr Goandal. “They are looking for localised and relevant services, as well as being consumers of global content and services.”

The investor says the global vertical opportunities within the Muslim lifestyle economy include: gaming and localised digital content; the travel and hospitality sector to destinations globally within the halal segments; the digitisation of offline services such as food delivery, shopping, education and health; fashion concepts; and social media in a Muslim context with a focus on lifestyle.”

Mohammad Nazir, an entrepreneur and the chairman of Ummah Mobile, says many small businesses are acquiring funding from family and friends.

“The investors have not yet been able to understand the vertical niche market growth potential and mostly miss out in delivering halal investment to these businesses and continue to focus on halal mortgages and real estate.”

Mr Nazir says his advice is simple: “If you require funding, you need to know your target market, have a clear strategy on how your business will appeal to your audience and have clear execution on how you will market to that audience. Beyond this, you will need a detailed financial plan on how you invest in acquiring your market and how you and your investor will be rewarded.”

He says investors in Muslim SMEs will look for three key factors. Firstly, is the business halal? Muslim SMEs need to ensure that their products are certified halal by credible and recognised halal certification bodies but they also need to ensure that their business operates with halal principles at core of all business critical functions.

“Are you disrupting an existing market today? Are you converging markets and/or technology? If the answer to either of these is ‘yes’, you will be seen as a good investment,” Mr Nazir says.

Mr Goandal offers several more tips for Muslim SMEs that are seeking venture capital (VC) investment. He says VC companies look for highly passionate teams with complementary competences that can develop and scale the business.

“Make sure to have a proof of concept done,” he adds. “The VCs don’t invest in just an idea. If your idea is tested and proven, it is also easier to get a higher valuation of the company so you don’t need to give up too much of the company to investors.”

The investor also says SMEs must clearly demonstrate the strength of the business model. “Only ask for the money you really need with a clear articulation of what the money is needed for,” he says.

“Start early and engage with multiple VCs as it takes more time than you think.”

Imran Kausar, the founder of Haloodies, a UK halal food brand for Muslim millennials, says: “Some entrepreneurs are naive and they have the idea but they don’t understand the business path. Others understand the business path but they don’t have the network and the connections. The latter simply needs introductions.”

But the bottom line is, he says, that there is no lack of resources and support online, “whether its financials or business plan help”.

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