Muslims concluded the celebration of Eid Al Fitr this week, marking the end of Ramadan in lockdown. During this time, 64 per cent of UAE consumers reported an increase in online shopping, according to Criteo. Governments in the region urged people to give presents instead of the traditional Eidiyah (cash) to children in a bid to prevent the spread of Covid-19, further prompting online purchases and money transfers. 

Muslims account for a quarter of the world’s population according to the Pew Research Center, and their spending power and habits is one of great interest to not only retailers, but investors too, creating what is now known as the “Islamic economy”. This economy comprises halal food, travel, cosmetics, modest fashion and Islamic finance and other goods and services that are “halal” or align with Islamic principles. 

Tausif Malik, an American-Indian social entrepreneur launched the world’s first halal angel investors network in May this year with the aim to promote innovation and halal entrepreneurship to mobilise a consumer market he says is worth $5 trillion. 

“Halal Angel Network was established with a vision to connect investors with different startups which are Sharia-compliant, which would serve the society and economy alike,” says Malik. 

For Malik, a Sharia-compliant startup is one that has “a social impact, takes care of its employees, makes everyone accountable for their own actions and then eventually when it makes money, it supports the poor in the neighbourhood through corporate social responsibility (CSR)”.

To be eligible for funding from the Halal Angel Network, startups “should not be bad for the environment, not driven by a false operation or copycat another model”, says Malik. “If somebody copies the Amazon version we are not interested because it is some money stealing idea.”

The network is looking to invest in startups of all sizes in the core sectors of the Islamic economy such as pharmaceuticals, food and beverages and fashion. 

“Nobody talked about modest fashion in a big way. There are a lot of fashion bloggers doing that, but it has not come up under a big umbrella yet,” he says. “We [also] tend to invest in healthcare startups given the increasing importance of the sector as a result of Covid-19 pandemic.”

In addition, the network is also taking an interest in startups operating in future technologies - including blockchain, cryptocurrency, financial technology, given their “high valuations”, adds Malik. 

“We have several requests by 600 investors and startups from across the Mena region and Gulf area, mostly from Oman,” says Malik. “Our target now is to onboard one hundred angel investors by the end of August and a couple of hundreds of them in total by the end of the year as we are looking to raise $100 million worth of investments.”

Globally, Muslims spent $2.2 trillion in 2018 across the food, pharmaceutical and lifestyle sectors according to the 2019 Global Islamic Economy Report and the market is set to grow to $3.2 trillion by 2024.

In between 2018 and 2019, $1.2 billion in disclosed private equity investment was invested in the Islamic economy, reflecting a growth of 399 per cent on comparable transactions across halal products and services and Islamic finance. The biggest markets for the Islamic economy are the UAE, Saudi Arabia, Malaysia and Indonesia and the Halal Angel Network plans to set up offices in the Middle East and North Africa (Mena). 

“The halal market [in Mena] is approximately valued around $1-2 trillion minimum,” says Malik. “The opportunity for growth is robust and the market is lucrative for more investments in halal compliant companies.”