18.9 C
Los Angeles
Saturday, December 2, 2023

“We Got Funded!” Takadao’s US$1.6 Million Pre-Seed Round Marks Tim Draper’s First Investment In A Saudi-Based Startup

Must read

Opinions expressed by Entrepreneur contributors are their own.

You’re reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Saudi Arabia-headquartered Takadao, a Shariah-compliant blockchain-powered insurance platform, has raised a US$1.6 million pre-seed round led by US-based early-stage venture capital (VC) firm Draper Associates. The round also saw the participation of two Saudi-based entities: BIM Ventures, a venture builder, and Core Vision Ventures, a VC firm. Another participant in the round was Prince Sultan bin Fahad bin Salman Al Saud.

Founded in 2022 by husband and wife duo Morrad Irsane and Sharene Lee, Takadao’s Takaful insurance platform has been built as a decentralized asset organization (DAO) on the blockchain and serves as a halal alternative to conventional insurance schemes. The new capital, Irsane says, will be directed solely towards its two main two main products: Takaturn- a community-owned savings and loan program, and Takasure- a yet-to-be-launched Takaful insurance DAO fund. “The new funds will be used on continuing to develop and roll out products for our community, with our flagship product Takasure set to be launched in June of 2024,” Irsane adds. “In the meantime, we have just launched Takaturn 2.0. -a savings and loan program that is based on the chit fund or committee concept- that helps people grow their crypto savings while giving them access to liquidity in the form of a 0% interest loan.”

As a two-year-old startup that is only just foraying into the global market, getting a nod of approval Draper Associates’ founder and renowned venture capitalist Tim Draper has proved to be quite the milestone in and of itself for Takadao. “Every investor that comes on board is a morale boost for us because it means that someone believes in us and wants to support us,” Lee says. “With Tim, along with the morale boost comes added value in the form of his networks and advice. Tim has invested in so many startups over the years and has a front-row seat to how businesses get built. After all, he is the father of viral marketing with his advice to Hotmail back then. Having him on board means a lot as we expect the journey to be tough and will need mentors to help us achieve our goals.

Sharene Lee and Morrad Irsane, co-founders, Takadao. Source: Takadao

Now, it is perhaps obvious to state that Takadao’s services are largely targeted towards the regional and global Muslim population. But Irsane points out that with Takadao’s use of blockchain technology and Web3, the issue of reduced accessibility within the overall Islamic Finance space can be rectified. “Islamic finance based on existing banking infrastructure has always been a compromise at best,” Irsane continues. “Because the banking infrastructure cannot be extricated from interest, which is prohibited in Islam, a lot of workarounds have to be in place for Islamic finance to exist. As a result, traditional Islamic finance suffers from inefficiency and a lack of confidence by Muslims, which hampers widespread adoption. The blockchain and cryptocurrencies offer a new infrastructure upon which we can build Islamic finance, since it isn’t inherently interest-based and doesn’t require as much compromise to achieve a pure Islamic financial model. It is also much more transparent, fairer and accessible.”

Related: KSA-Based HR Tech Platform Jisr Raises US$30 Million In The Middle East’s Largest Series A Round For A SaaS Firm

But while offering a viable alternative to the Muslim population is innate to Takadao’s vision, the startup is also actively addressing the needs of the underinsured masses. “Billions of people are uninsured because insurance is a purely profit-seeking business,” Lee laments. “Insurance wasn’t always this way and the earliest insurance models were cooperative and were a means of protecting one another. However, in modern times, insurance has morphed into a highly profitable financial service that is practically inextricable from banks. As a result, being unbanked usually also means being uninsured. By using the blockchain and cryptocurrencies, Takadao provides access to the unbanked and uninsured globally; all one needs is an internet connection and a device.”

As it turns out, it was this approach that impressed lead investor Draper as well. “Takadao is one of those companies that you don’t know quite where it’s going to go, but if it succeeds, it’s going to be really impactful and make a big difference in the world and this is a world that I want to live in,” Draper says. “The insurance business generally has become corrupted and Takadao is going right after the insurance business with something that’s very pure; the blockchain is pure, Bitcoin is pure, decentralization is pure.”

The Takadao team. Source: Takadao

While it may seem that Takadao operates at the intersection of the underinsured and the Muslim populations, Irsane affirms that the startup is definitely more inclusive than one may assume it to be. “Our focus is on populations with high levels of crypto adoption, generally driven by a need to have usable money in an environment of high inflation of the local currency- it just so happens that these populations are also heavily Muslim,” Irsane explains. “A perfect example is Lebanon, where the banking system has collapsed and people pay one another with crypto for everyday transactions. But Takadao’s services are for all people, regardless of religion. Takadao’s services are for people who have traditionally been excluded from the financial system. We therefore build financial products that are community-owned such that the ultimate beneficiaries are the participants themselves and not external shareholders who are only seeking profit.”

With Takadao now being part of a consistently growing Islamic Finance industry, its co-founders hope that this historic funding round can set something of a precedent for other up and coming startups in this space. “Muslims make up 24% of people in the world and are the youngest and fastest growing population, and so it’s only natural that Islamic finance and the Islamic economy becomes an attractive area for investment,” Lee says. “The best investors not only predict the future but take an active part in shaping it by investing in it. Takadao is not the first Islamic fintech and will certainly not be the last, but hopefully we can help show that Islamic finance is not only for Muslims but is a paradigm shift that is good for humanity generally. Investing in it will only help make the world a better place.”

Related: Gamechangers: Zad Co-Founders Abdulrahman Alkharafi, Abdullah Al-Ansari, and Abdullah Al-Otaibi

Source link

More articles


Please enter your comment!
Please enter your name here

Latest article