In a region where 42% of the population is Muslim, the rise of Halal startups in Southeast Asia to cater to this demographic is unsurprising. Those wishing to lead a halal lifestyle, follow Islamic finance principles and ensure that they comply with Sharia laws and ideals can now find more technology-based and innovative products to assist them in their religious endeavours. Indonesia, Malaysia, and Brunei are the three countries in the Association of Southeast Asian Nations (ASEAN) with predominantly Muslim populations, while other countries also have large numbers. This makes the region a prime spot for the ever-growing halal market.
Globally, the halal economy reached US $7.2 trillion in 2020, with predictions showing it is likely to top US $11.2 trillion by 2028.
The rising Islamic fintech scene in Southeast Asia
As the sector continues to grow, encompassing fintech, traveltech, foodtech and other industries, entrepreneurs and investors are noticing the market’s importance and are pivoting their products, services and funding into more Sharia-compliant and halal-friendly startups. By developing and investing in startups that cater for this massive demographic, entrepreneurs and venture capitalists (VCs) are providing much-needed and valued options for many inhabitants in Southeast Asia and beyond.
Here are five of the Halal-focused startups that are disrupting the ASEAN scene.
Indonesian fintech startup ALAMI brings ethical Peer-to-Peer (P2P) lending to the country’s SMEs by connecting funders with businesses requiring financing through its app. It offers many financial borrowing types, including invoicing, purchase orders and community-based funding for agriculture.
Recently, it launched an accelerator programme, ARQAM, which will onboard participants in November 2022 with a focus on startups working in the Halal culinary, fashion and other open sectors. To date, the Jakarta-based fintech has raised US $67.5 million over seven funding rounds, with the latest being a debt-financed round worth US $30 million in April 2022, led by Lenable.
With a growing trend of social eCommerce and reselling in the region, Evermos is tapping into the sector in Indonesia through its app. The platform guides resellers through every step of the selling process, from setting up their online store to selling on social media and also offers shipping and logistical solutions.
Since 2019, Evermos has participated in three funding rounds, raising US $38.3 million from investors such as Jungle Ventures, Endeavor Indonesia and UOB Venture. Its latest Series B funding round in September 2021 came in the sum of US $30 million.
Another fintech product working in the Halal sector, HelloGold offers investors the opportunity to make money through gold trading. The startup makes it simple for Malaysians to save money by making it possible to purchase, sell, and invest in gold at low entry points. With the SmartSaver option, users can grow their bank accounts by creating an automated, personalised plan for 12 months of investments.
Having experienced a growth spurt during the pandemic, HelloGold is on a stable financial footing in its two markets of Malaysia and Thailand. It has worked with charities such as a campaign that raises funds for children and babies in need of emergency medical care, cancer charity Homes of Hope and mental health service Relationary through the Global Sadaqah fund.
This Singapore-based startup makes travel planning easy for Muslims through its platform. Offering guides, reviews, and online booking services for those seeking to travel to various destinations, restaurants, and hotels, Halal Trip is a one-stop shop for all things Sharia travel.
The app helps travellers to locate Halal restaurants, find mosques and point them in the direction of Mecca no matter where they are in the world. Its in-flight prayer time facility also gives those travelling through time zones the chance to meet their religious obligations in a stress-free manner.
As the halal food market moves towards a projected US $1063.11 billion by 2030, Malaysian startup Verify Halal has built an app that helps people find suitable products and services. The app uses a blockchain database of scanned items globally to confirm whether a product or service is halal or not. It also works with various certification bodies worldwide to ensure the veracity of any halal claims.
Through its parent company, Serunai, Verify Halal also offers training opportunities with its Halal COE centre of excellence. The centre aims to bridge “the gap between Local Authority, Industry and Consumers”, helping the Sharia-compliant food, medical, fashion and financial industries to tap into this massive market.
With many Halal startups in Southeast Asia emerging stronger from the COVID-19 crisis, financing for companies working within the Sharia market is likely to increase. With so many residents of the Muslim faith, supporting the Halal lifestyle and Islamic finance products in the region is paramount. Globally, Islam is the fastest growing religion, and with this set to continue, investments in Halal market-focused products and services are also likely to progress apace.