The technology industry is abuzz these days with stories of companies raising money at ever higher valuations and the number of technology-focused companies getting huge amounts of capital and even higher valuations. This year alone, 107 companies have completed fundraising rounds with venture capital investors of $100 million or more, according to a report from CB Insights and KPMG. Of these companies, 35 have entered the ‘unicorn club’ (VC-backed companies with $1 billion valuations).
One area where fundraising from venture capital is rare is in the Islamic economy overall and the Islamic digital economy in particular. In their Digital Islamic Services Report, Deloitte reports “no VC funds in the Middle East […] specifically targeted at Islamic needs and Digital Islamic Services”. The dearth of venture capital interest in the Islamic digital economy does not mean there is a lack of a market. Muslim consumers represent an estimated 8% of the global digital economy according to an ongoing Thomson Reuters study on the Islamic Digital Economy that we had an exclusive look at and the aggregate value of Muslim consumers within the digital economy is expected to grow 20% annually through 2020, outpacing the rest of the global digital economy.
The growth rate of the Islamic digital economy, and its potential to outpace the (still rapidly growing) digital economy is entirely understandable with a large Muslim population that is younger on average than the global population. In some markets, such as Pakistan, the digital economy is just becoming enabled with the recent launch of 4G mobile networks that make it possible for many apps (particularly those relying on GPS technology to customize content based on specific location).
Progress, such as the introduction of 4G in Pakistan, will create a massive opportunity in similar markets where the cost has been too high and the mobile networks not ready to support the demand for capacity from widespread diffusion of smartphones. This is particularly likely to be the case in markets where the population is younger, which will support rising demand for mobile technology from Quran apps to Halal Travel Apps, online Islamic education websites and location-services software to locate the nearest Halal restaurant. The Islamic Digital Economy has woven into the lives of many Muslims worldwide and has become part of their day to day lifestyle.
With the backdrop of venture capital funds seeking out the latest ‘hot’ digital economy company and the dearth of Islamic digital economy companies being a part of this ‘unicorn economy’, there is a big opportunity for tech entrepreneurs if they can get noticed. One way to get noticed is through the first #Innovation4Impact competition that will be a feature at the Global Islamic Economy Summit (GIES) in Dubai, UAE from 5-6 October 2015.
Innovation 4 Impact, which is organized by the Dubai Silicon Oasis Authority and Thomson Reuters, in collaboration with the American Muslim Consumer Consortium, is looking for innovative entrepreneurs across the globe whose solutions will disrupt the status quo across the digital sphere. The competition aims to support start-ups and businesses in the Islamic digital economy and serve will as an incubator for SMEs across the world. The winner will receive a combination of incubation services worth over $10,000 with an all-expense-paid trip to Dubai to showcase their business in GIES.
The Innovation 4 Impact competition is open to any company or entrepreneur with a potentially groundbreaking idea or business venture. Applicant’s ideas will be judged on different aspects including: innovation, economic and social impact as well as the scalability across markets and regions. Visit the website for details on how to submit your idea and to enter. The deadline is August 10, 2015!
Written by Blake Goud, Islamic Finance Community Leader at Thomson Reuters.