Islamic economy offers host of opportunities for start-ups
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Islamic Business & Finance speaks to Shimmy Mathew, Chief Financial Officer, KBW Investments
TUESDAY 09, JULY 2019
How much potential do you see in the Islamic economy from an investment perspective?
I think the Islamic economy offers boundless opportunities; especially for start-up s. This is the still under-served – and often untapped – market share that entrepreneurs are looking for when they are founding a new venture. This is especially true for segments that are still relatively nascent like FMCG and the Islamic hospitality sector. So-called ‘dry hotels’ aren’t a niche market; there is a huge demographic of clients that seek this out when planning trips for both business and for leisure travel.
Building on the FMCG example, our sister company KBW Ventures has invested in Geltor. Briefly, Geltor is a B2B deep tech company that develops plant-based collagens and gelatin for use in cosmetics and foodstuffs. The obvious implication here is that the whole Islamic economy - and those that observe Kosher as well - will opt for products that are made with Geltor’s scientifically advanced ingredients.
Products made with Geltor’s patented collagen and gelatin will become the preferred products for two simple reasons: no part of the cosmetic or food product will be derived from swine, making it extremely attractive for those who are observant in terms of faith, and the ingredient quality and breadth of application is truly excellent.
Certified Halal, Geltor’s N-Collage is the first-ever vegan collagen technology, and it was awarded the “Innovation of the Year” title at the 2018 CEW Beauty Awards. It is quite a prestigious honour to receive from a majorly influential B2B cosmetics body.
KBW is greatly focused on sustainability and ethical concerns, do you feel that there is a lot of overlap between those concerns and Shari'ah-compliance?
Sustainability, ethical business, and Shar’iah-compliance are highly compatible. So many parallels exist, not just in terms of governance, but in terms of who you can cater to in the market. While Shar’iah-compliance is clearly more of financial or business-centric type term, for those that are familiar with it, it does inspire confidence in the overall ethical footprint of the company itself.
I feel the major gap in knowledge lies in terms of the lay consumer knowing what exactly Shari-ah-compliance entails - this would be more of a communications issue and would need some type of strong marketing to really be taken advantage of in the wider sense. That said, Halal and Kosher certifications are widely understood and thus inspires confidence in vegan markets for example, when determining if swine byproducts were or were not used in the production process.
Does Shari'ah-compliance extend past just the businesses that you work with to your operations?
KBW Investments works across manufacturing, development, and construction mainly. While these companies aren’t certified Shari’ah compliant as a financial operation would be, we are in line with Islamic principles. Our only officially compliant business, Crestmount Capital, was divested recently through a sale to a private individual.
What are you working on now? What do you have planned for the future?
Presently, our efforts are concentrated on Arada. We are in the process of handing over Phase 1 of Arada’s first community, Nasma Residences in Sharjah. Arada’s Chairman recently presented the keys to the very first homeowner in Nasma Residences during a small ceremony; it was the first of 107 homes in Phase 1 to be handed over.
It is worth noting here one of the value-adds consistently mentioned by Nasma’s homeowners is the proximity of Sharjah’s largest mosque. During our sales phases, this was often alluded to by our customers as a desirable factor. The mosque itself was opened by H.H. Sheikh Dr Sultan bin Muhammad Al-Qasimi, Supreme Council Member and Ruler of Sharjah, and garnered a significant amount of attention due to its capacity of 25,000 and for its stunning architecture and design schema.
What is your personal finance philosophy?
I have a few rules that I believe are important in terms of personal finances. Do not over-leverage; you should be extremely aware of your limitations. When considering new investments, conservative heads prevail. Diversify investments and assets in your portfolio to ensure that you weather various markets shifts. And finally, it is essential to save a minimum of 20 per cent of your income. This will see you through any unexpected occurrences, financial or otherwise.
CPI Financial was established in Dubai in 1999 to meet the needs of an ever-expanding financial community, offering a comprehensive portfolio of market-leading products and services tailor-made for the banking and financial services sectors.