Islamic Finance 

Islamic fintech start-up HelloGold partnering with Africa, China-focused microlender Baobab, raising Series B funding

| 14 February, 2019
 Emmy Abdul Alim
Islamic fintech start-up HelloGold partnering with Africa, China-focused microlender Baobab, raising Series B funding
Photo: HelloGold co-founders Ridwan Abdullah and Robin Lee. Photo supplied by HelloGold.

Malaysia-based Shariah-compliant fintech start-up HelloGold is developing a new gold savings platform for Africa and China-focused microlender Baobab.

Baobab is expected to launch the new integrated savings platform later this year.

“Baobab customers will be able to save in gold through the Baobab app, thanks to HelloGold’s platform,” Robin Lee, HelloGold CEO told Salaam Gateway.

“They will also be able to collateralise the gold they own through the app to access Baobab’s credit services,” Lee added.

HelloGold’s products are Shariah-certified by Malaysia-headquartered Amanie Advisors and Lee says he expects the Baobab platform to also be Shariah-compliant.

This is HelloGold’s first partnership in a market outside Malaysia.

Baobab operates in nine countries in Africa—including Organisation of Islamic Cooperation member states Nigeria, Senegal and Tunisia—and in the Sichuan province in China.

“We operate in a number of countries where currency devaluation or lack of currency erodes the value of our customers’ savings,” Baobab Group CEO and founder Arnaud Ventura told Salaam Gateway.

“By enabling easy access to purchase gold, our customers are now able to protect and enhance their savings. It introduces a form of portfolio diversification that isn’t available on the market today for the customers we serve,” added Ventura.

HelloGold and Baobab told Salaam Gateway they decided to partner after being introduced by a mutual business contact.

Baobab started in 2005 as Microcred. It provides financial solutions for around 800,000 micro-entrepreneurs and small- and medium-sized enterprises (SMEs) in Africa and 23,000 in China.

While 60 percent of its overall financial solutions market is in the trade sector business, 16 percent is in the services sector and 3 percent in the agri sector, said Ventura.

In the last three years the microlender has disbursed almost 2.5 billion euros ($2.82 billion) in loans, growing from 650 million euros in 2016 to 850 million euros in 2017 and 950 million last year.

Loans for individuals, microenterprises and SMEs range from a few euros to more than 300,000 euros, said Ventura.

The loans are financed by savings. Baobab collected 240 million euros in savings in 2018, from 195 million in 2017 and 158 million in 2016.

Baobab hopes to increase its gross loan portfolio and savings between 25 percent and 40 percent in 2019, said Ventura.

“We will keep focusing on our existing markets but will look at accelerating our digital transformation,” said the CEO.

HELLOGOLD RAISING SERIES B FUNDING

HelloGold’s Robin Lee told Salaam Gateway the company will be raising a new round of funding this year.

“HelloGold will be going to market to raise B round financing this year to fuel growth plans in ASEAN and beyond as well as evolve product offering into a full-suite digital financial services platform,” said Lee.

“There are ongoing discussions with institutional and private equity investors for our long-term strategic roadmap that includes market expansion in Southeast Asia and the Middle East, extension of HelloGold’s financial savings platform, adding more features and asset categories,” he added.

The start-up is also in discussions with government agencies in “a number of countries”, said Lee.

Since its launch in 2015, HelloGold has raised around $10 million to prove its concept in the Malaysian market.

In 2017, the start-up launched the first Shariah-compliant mobile app that allowed users to turn their savings into fully-allocated gold.

Its GOLDX, launched in January 2018, is the world’s first cryptocurrency to be Shariah-certified. GOLDX is a tokenised gold product representing ownership of fully-allocated investment-grade gold on the blockchain.

In October, the HelloGold Token was certified as Shariah-compliant and ERC20. ERC20 refers to the technical standard used for smart contracts.

Aside from early investors, HelloGold also received funding from Silicon Valley’s 500 Startups last year and high net worth investors.

Lee said the start-up will work with partners in new Southeast Asia and Middle East and North African markets this year.

“We will be working with partners in those markets – large enterprises with a significant customer base,” he added.

HelloGold says its app has hit over 100,000 downloads and that it has 35,000 customers.

($1 = 0.89 euros)

(Reporting by Emmy Abdul Alim; Editing by Seban Scaria seban.scaria@refinitiv.com)

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