Alami, a Sharia-Based Fin-tech Startup, Received Funding from Investors

Some foreign investors consider the sharia market in Indonesia very potential because the majority of the population is Muslim. For this reason, three venture capitalists and individual investors or angel investors invest their capital in the local Islamic finance technology (fin-tech lending) startup, Alami.

The three venture capital companies are Golden Gate Ventures, Agaeti Ventures, and RHL Ventures. In Indonesia, Golden Gate Ventures has invested in Gojek, Tanihub, Alodokter, Sampingan, DuitPintar.com, Ruma, Printerous, Taman Jalan, and Gadjian. In total, this Singaporean venture capital has invested in 30 companies in more than seven Asian countries.

They focused on investing USD 1 to 5 million to startups. Golden Gate Ventures Founding Partner Jeffrey Paine said that there are many potential sharia-based market segments in Indonesia. “The market is big, but fin-tech has not yet reached it. This means the opportunity is big,” he said.

In addition to fin-tech, a technology-based company that offers culinary products, food ingredients, and halal commercials also has a big potential since these are on-trend. The business model can be a software provider targeting the corporation or Business to Business (BTOB).

Sharia Products in Indonesia Are Considered Interesting by Investors

“The potential is directly targeting the final consumer, such as halal cosmetics for the female segment. We are looking for it since it is quite interesting,” Jeffrey explained. But, according to him, the challenges of sharia-based business in Indonesia would be in public education.

Startups need to study the market in-depth, understand and educate consumers. That way, the company can be absolutely sure to enter the intended market. RHL Ventures partner Satria Wilis said that his company’s main base is in Malaysia with a Muslim population of around 20 million.

The Indonesian market has more than doubled to 200 million. “We believe the potential of the sharia industry in Indonesia is very large,” he said. While consumers in Malaysia are more aware of Islamic financial products, Indonesian regulators are still encouraging the public to take advantage of these services.

Angel investors who are involved in funding commitments in Alami, Aamir Rahim also agreed that the potential of the sharia market in Indonesia is huge. Middle to upper-class income is quite a lot. “Technology has unlocked this gap and is able to capture the market for using Islamic products.”

Aamir Rahim himself is the former CEO of Citibank Asia Pacific Private Banking. On the other hand, CEO Alami, Dima Djani said that the investors had measured the potential of the sharia market in Indonesia. From the company side, according to him, Alami has shown a mature business plan.

Other Startups Start to Offer Sharia Products Too

“This is a new thing. For the first time, Indonesian sharia startups have successfully invited investors to invest,” Dima said. As a consequence, she hoped that there will be more investors who want to invest their capital in the country’s startups.

According to her, investors are interested in investing in Islamic finance fin-tech because the regulations already exist. The Indonesian Ulema Council (MUI) also issued a fatwa related to electronic money (e-money) and fin-tech payments. Now, fin-tech payments made by State-Owned Enterprises (SOEs), LinkAja also penetrated the Islamic market.

Moreover, there is also Tokopedia through its new feature, Tokopedia Salam. In addition to Alami, fin-tech financing that penetrated this market is Investree. And, there is a great chance for other startups to start running the same business, especially after the regulations.

Alami itself is a peer-to-peer startup that offers funding based-on sharia principles. It becomes the place for Indonesian SMEs to meet lending institutions. This startup previously won a runner-up position in a Pitch Pit TaqwaTech competition. The company has also officially registered in the Financial Services Authority (OJK).