Toronto-based Manzil offers Sharia-compliant home financing and investments (Shutterstock).

Islamic Finance

Canada’s Manzil seals $1.91 million seed financing

Sharia-compliant home financing and investments platform eyes products, acquisitions and geographic expansion opportunities.


Toronto-based Manzil recently closed a $1.91million of seed financing deal with an investor consortium to support the start-up’s growth and scale and its international expansion goals.

Last month the company acquired Muslim Will, a Canadian digital Islamic wills platform, for an undisclosed all-cash deal in a move that expands its product portfolio and enables Canadian Muslims to create a will in a Sharia-compliant manner.

Manzil announced the two deals in separate press releases.

Calgary-based Think Financial led the equity seed financing with participation from Holt Xchange, Innate Capital Partners, Jasaya Investments, David Beatty and other angel investors based in North America and the Middle East.

Established in 2017 and officially launched three years later, Manzil offers and distributes halal financial solutions in Canada. In May 2019 it raised CAD$1.15 million ($910,000) in pre-seed capital.

The latest seed financing brings the total raised to CAD$3.51 million ($2.77 million).

Mohamad Sawwaf, co-founder and CEO of Manzil, told Salaam Gateway the start-up plans to use the seed financing to bolster the technology team, product development, marketing and licensing.

“Our aim is to be profitable so we do not have to raise (capital), but if we do, it will be on our terms and be transformational for the business. If everything goes according to plan, we can expect to be breakeven and/or profitable within 12 to 18 months,” he said.

As part of its growth and development, Manzil plans to expand its product offering over the next one to two years. The company is working on launching new funds, credit cards, savings and chequing accounts, auto financing and other services to complement its Islamic digital banking services.

However, Sawwaf added there was a lack of Canadian-listed and denominated funds and the company’s focus would bring Accounting and Auditing Organisation for Islamic Financing Institution (AAOIFI)-compliant and income producing funds.

Manzil’s strategy for introducing more listed funds would add to Canada’s small, but growing, Islamic asset management scene. In December Manulife launched the Manulife SP Funds S&P 500 Shariah Industry Exclusions ETF (exchange traded fund) Fund and the Manulife SP Funds Dow Jones Sukuk ETF Fund to its iWatch platform.

Similarly, Toronto-based Wealthsimple launched the country’s first-ever listed halal ETF (Wealthsimple Shariah World Equity Index ETF) earlier in the year.

There is a compelling rationale for increasing the number of halal products and funds in Canada. Muslims account for around 3.2% of Canada’s population, according to a 2017 study by Statistics Canada, and expected to grow to between 5.6% and 7.2% by 2036.

However, despite this projected growth, Canadian Muslims still lack Sharia-compliant car financing, student financing and commercial financing options, according Sawwaf. He argues the biggest challenges for Islamic finance in Canada mainly constitute licensing and regulations.

“The time and money it takes to get the simplest of licenses are extensive and a deterrent,” he said.

Overseas expansion and acquisitions

Sawwaf revealed Manzil has plans to enter new markets over the next two years. The company aims to offer its digital banking platform in the US, UK, United Arab Emirates (UAE) and Saudi Arabia.

He said nobody really had a completely digital Islamic bank that was readily accessible with low cost and great customer service.

Meanwhile, Sawwaf said Islamic inheritance was complicated and the Muslim Will acquisition provided the opportunity to meet clients’ demands for assistance with them.

“It’s a profitable business with a high margin and we bring on more than 3,000 clients to the Manzil platform allowing us to cross-sell both ways.”

He said the company was open to acquiring new businesses and start-ups if they fitted within their strategy.

“We are always on the market to acquire. If there is a business that makes sense to buy and it’s a product on our roadmap, we will always entertain those discussions.”

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