Wahed, Halal FinTech Startup, Lands $5M In Seed Funding To Help Religious Muslims Invest

Wahed, the investment firm focused on religious Muslims, has landed $5 million in seed funding, which it plans to use to provide the nuanced advice when it comes to some Muslim investors find ‘halal’ types of investment.

According to a report in TechCrunch, Wahed CEO Junaid Wahedna said theirs is a market that a lot of people are afraid to enter but one that is rife for advice on types of investment that are appropriate for religious muslims. The executive is aiming to create a robo-advisor type model of financial services to better serve Muslims who want to build a halal personal finance portfolio. Robo-advisors rely on algorithms to provide stock picks and financial advice to investors based on the answers to a series of questions. By taking the investments online, it cuts out the middleman and reduces the fees it has to charge clients. The minimum investment is $500 on Wahed, making it palatable for first-time investors.

“Religious Muslims have certain rules they have to abide by,” Wahedna said in the report, pointing to prohibitions against making money from certain forms of interest as well as forbidding investments in alcohol and firearms, as well as other types of investment. “What a lot of Muslims do is either keep the money in cash or put it in real estate.”

While Wahed is going after a specific group of investors, the company’s CEO doesn’t think it’s a niche player. During the beta, which included more than 1,000 users, the team got interest from more than 30 states in the U.S. and countries around the globe. The CEO said he’s even had Christian leaders inquiring about the investing product.

“The Wahed approach to ethical investing in the digital age utilizes a human review panel to screen certain stocks, commodities and other investment types that are not socially responsible or Shariah-compliant, before automating algorithm-based investments. Clients will receive a recommended optimized and diversified portfolio based on their own risk tolerance. Using Wahed, American Muslims can now digitally automate long-term, halal investments into securities such as Sukuks and gold, while managing their halal portfolios at a low cost.”

The company plans to use the $5 million in funding to scale up its personal finance service.

“There’s a huge amount of products we can offer, from mortgages to debit cards,” he said. “It’s not just one product.”