In Malaysia, the operational processes of Islamic venture capital and conventional venture capital diverge, particularly in terms of investment activities, with Islamic venture capital investing solely in Shariah-compliant funds and firms. In Malaysia, 64 Venture Capital Management Corporations were registered as of 2018. Unfortunately, there are still relatively few established Islamic Venture Capital Management Corporations in Malaysia.
Malaysian-based venture capital firm, Ficus Capital, announced Ficus SEA, its flagship US$13.6 million (RM60 million) fund.
With it, the world’s first shariah-compliant venture capitalist is looking for startups that are bringing impact to the environment, society, and governance (ESG) sustainably.
BusinessToday interviewed Abdullah Hidayat, Executive Director of Ficus Capital and he shared his thoughts on being a shariah compliant venture capital and the challenges that startups are facing in this day and age.
“We chose the name Ficus because of the fig tree’s cultural importance. It is also distinct in terms of how we envisioned the firm. We regard our startups as saplings that will flourish if given the correct amount of sunshine and nourishment. “Some of the most successful venture capital businesses are also named after trees.
We are committed to supporting the growth of companies that are beneficial to society and sustainable economically. Being a shariah-compliant venture capital, we believe ESG, and sustainability is deeply rooted in Islamic economics and investment ethics within the parameters of people, planet, profit, and principle. All our investment portfolios will be based on that,” Abdullah Hidayat.
“We noticed that there is a huge gap in the market, not only in Malaysia but globally, on the need for shariah-compliant venture capital.
We founded Ficus in 2018 with the help of MDEC to help startups who are facing challenges with funding.”
The company has invested $450,000 in Eclimo, a Malaysian-designed and owned electric vehicle company. It has also invested $400,000 in Assemblr, Indonesia’s revolutionary augmented reality (AR) platform company that helps users to create AR content via its web-based platform.
“We very much focus on sustainable and responsible funding. If a company comes to us and says that they have raised RM 12 million last year we are not that impressed. But if you tell me that you have managed to secure a contract, I will be more interested to hear from you rather than this “western Silicon Valley” way of raising money only. Since we come from the East, we are a bit more responsible and more sustainable,” added Hidayat.
Hidayat believes that if Malaysia wishes to be perceived differently from other nations, ESG is out of the question because the Scandinavians have a firm grip on it. So the idea is to integrate Islamic principles, which are very much the meaning of Asian values and should be championed by Malaysia right now.
