Islamic fintech startup Wahed has opened its first physical branch in London’s Baker Street. The glossy retail location is designed to look like an Apple store.
Wahed
The investment platform, backed by the likes of oil giant Saudi Aramco and French footballer Paul Pogba, is launching a new proposition in the UK. It is a physical branch and bank account backed by gold.
New York-based Wahed, which describes itself as a ‘halal investment platform’, has opened a branch in the UK to target the UK’s 3.9 million Muslims with its Shariah-compliant investment management and advisory services.
The shiny retail location has a design similar to an Apple store, with a digital display inside and a bright sign with its logo on the outside. Right across from the HSBC branch.
Khabib Nurmagomedov, a former professional mixed martial artist from Russia, is the company’s promoter and is expected to attend the chapter opening on Tuesday.
Wahed also debuted a debit card that allows users to deposit funds in exchange-traded products that track the price of gold.
Investors can redeem the gold in their account for real bars. Junaid Wahedna, his CEO and co-founder of Wahed, said this is a way for Muslim consumers as well as non-Muslim consumers to combat currency fluctuations and rising costs of living. said.
“[Muslims are] In an interview with CNBC, Wahedna noted the market opportunity for digital Islamic finance.
Banking start-ups such as Monzo and Revolut have thrived in the UK, where there are no physical bank branches, offering smartphone apps to help users manage all their finances. But Wahedna warned that this risks leaving Muslim consumers behind.
“In England, [the Muslim community is] It’s actually one of the most socio-economic segments in the country,” says Wahed’s boss, who have “low income or financial literacy.”
“They have trust issues,” he added. “So they want to see your physical presence before they trust you with money.”
Wahed’s services are designed to help clients adhere to the strict tenets of Islam regarding financial services. Shariah law prohibits its followers from charging or earning interest on loans, or from investing in companies that make most of their money from the sale of alcohol, gambling, etc. .
Wahed prohibits investments in companies that make money on loans, gambling, alcohol and tobacco. Also, Wahed accounts do not offer interest on savings or advertise large returns for risky crypto tokens. Instead, the value of user deposits tracks the value of gold, while precious metals fluctuate in price depending on supply and demand.
“I think it really suits the Muslim community and their needs,” Wahedna said. “Otherwise, what will happen to the Muslim community is that they are so underserved that they keep their money in cash under their mattresses and in very dangerous places, and fraud is committed in the community. It’s done, someone takes advantage of them, and the cycle of poverty just continues.”
CEO slams lending-focused fintech
Junaid denounces the status quo of modern fintech companies, saying that the rise of Klarna and other hyped “buy now, pay later” services has made the industry too focused on consumer lending. suggesting.
“All their business plans are built around lending income, right? Even a digital bank, okay, I will start as a new bank, but I plan to eventually get a banking license,” said Wahedna. said.
Wahed is debuting a debit card linked to a gold-backed spending account. The startup is backed by French football star Paul Pogba.
Wahed
According to him, Wahed focuses on generating revenue by charging a wealth management fee, which charges users a percentage of their total assets. The startup, founded in 2017, remains loss-making, but has reached break-even in Malaysia and the US, he added.
“I feel that fintech, like most of the financial industry, is very focused on lending,” said Wahedna. “In fact, I would say that many products are in a cost-of-living crisis, a debt crisis, or worse.”
“If you look at the companies that buy, pay now, people are struggling.
Wahedna emphasized that the company is not just for Muslims, but aims to serve adherents of other Abrahamic faiths, including Judaism and Christianity.
Our London branch staff assist clients in opening accounts, making investments and providing guidance on wills and estate planning.
Wahedna said the company is targeting not only the wealthy but also the less wealthy.
Wahed has so far received sums from investors including Saudi Aramco Entrepreneurship Capital, the venture capital arm of Saudi government-backed oil company Saudi Aramco, and French footballer Paul Pogba, who practices Islam. Raised $75 million in funding.
According to Refinitiv’s Islamic Finance Development Index, Islamic finance has grown significantly over the past decade and is expected to reach $4.9 trillion by 2025. Many other fintech companies are looking to enter the halal money space, such as Zoya and Niyah.