Photo: Baiza Bain, one of the co-founders of Malaysia-based Ficus VC. Photo supplied by Ficus VC

Islamic Finance

INTERVIEW-Look first into an entrepreneur’s soul before handing them money, says Islamic VC

KUALA LUMPUR - Compared to the ice cold world of private equity, where decisions are made on the strength of the numbers on a spreadsheet, venture capital is filled with nuance, passion and emotion. With no track record to call on to assess the potential of an early-stage start-up, an investor has to look deep under the skin of its founder. That is according to someone who has made the transition from offering cash to established companies to ones which will probably fail.

During the time Baiza Bain spent setting up Ficus Venture Capital, which launched last year, with his four partners, he kept his role under wraps.

Eighteen months after leaving a senior role in private equity, Baiza was based at a co-working space in Cyberjaya, a technology-themed suburb of Kuala Lumpur. There, he would mingle with others who used the place as an office, but none of them really knew what he did. And as he sat there incognito, he observed his co-workers, working what made each one tick.

“Yesterday, I met with a guy who had a table there,” Baiza told Salaam Gateway. “He was a founder of a start-up who was pitching me and he asked, “So you’re a VC?’. He had no idea, even though we had been in the same place for a while.

“That’s the best way because you get to see people in a very natural state. They don’t pretend with you just because they know you’re a VC. We don’t want that, we want to see the real person. When they’re relaxed they will tell you about their family, about what’s happening at home, what’s motivating them. Those are the indicators that are super-valuable to us.”

Those who are first to arrive and last to leave each day are the ones most worth watching. Take Carousell, a smartphone app for buying and selling goods that was founded in Singapore in 2012.

“I spoke to one of the early investors in Carousell. When it launched, eBay was already around the region. They would be directly going up against a giant. So I asked him what made him invest in Carousell.”

Like Baiza, the investor had been renting a co-working space where he observed the founders of the Singapore app at work. They would start early and leave late every working day. The principle of the software was a good one, but the headwind of competition would be fierce. The people behind it were not intimidated by this and they stuck to their goal.

“He said to himself: ‘If these guys have this work ethic, whatever they do will be a success.’ He invested in Carousell and now the company is worth $500 million. He knew for sure this small start-up from Singapore was going up against an American giant.”

In fact, the start-up’s latest valuation gives it a value of $550 million, after raising $56 million in April. Its founders have often listed their diligence as a factor for Carousell’s success. Chief executive Quek Siu Rui refers to this period as one of “laser focus” with “only so many hours in the day”.


Baiza, who is Ficus’s managing partner and its chief start-up whisperer with a goal of seeking out investible talent, had previously spent a decade as managing director of Shariah consultants Amanie Advisors. He reported to the head of Amanie, Dr Mohd Daud Bakar, who he calls his mentor. The Amanie founder instilled in Baiza the need to look for the humanity in whoever he encounters.

“I learned that you should treat everyone in an equitable manner. That’s the basic principle of Islamic finance. That was in private equity, but now as VCs, when we talk to founders, we don’t really look at their decks,” he said, referring to the pitches entrepreneurs rely on to convey their idea.

“The deck is secondary, just so we can see where they are going in terms of their business. But we look at them, we evaluate them as people. If they have more than one founder we look at their chemistry, whether they can work together.”

Ficus was set up to identify Southeast Asian start-ups that operate in the Islamic digital economy. It takes a broader view of what constitutes an Islamic digital economy start-up than fellow early-stage VC firms with an interest in investing in the space. It defines the Islamic digital economy as any business that is Shariah-compliant, but is not necessarily intended for the Muslim community.

Baiza estimates that 99 percent of technology companies will be Shariah-compliant anyway, regardless of their motivation. His targets are companies that either “comply” with Shariah or “don’t contravene” it.

His VC firm is setting out to identify the recipients of the 10 million ringgit ($5.99 million) it has set aside for its first investments, out of 25 million ringgit it has secured from investors in Malaysia and abroad. These commitments bring the Ficus 1 fund halfway towards its targeted first closing of 50 million ringgit.

It has been using Malaysia Tech Week in Kuala Lumpur, a city-wide technology festival which began on Monday, as a vehicle to find those first investments. On Tuesday it invited a number of start-ups to pitch for its money at an event Baiza likens to speed dating whereby entrepreneurs pitch their ideas to its VCs.

“There will be no single winner, but the good companies will be signed up,” he said. “We have allocated 10 million ringgit because there were some companies we met earlier who have been shortlisted and we’re going to have an in-depth talk with these guys in terms of how we can work together.”

Three or four start-ups in particular have caught the firm’s eye, though this will be the first time it has formally engaged with them.


The leap from private equity (PE) to venture capital has been substantial for Baiza, and has forced him to re-evaluate how a company should be assessed. In PE, the focus is on cash flows and contracts, which provide a solid basis from which an investment decision to be made. VC, however, enjoys no such constants.

“With PE, you can know if a company is going to make it, based on cash flow and based on the number of sales and contracts they have. But VC is totally different. You don’t look at the cashflow because there is none. You don’t look at their contracts because there aren’t any,” he said, as he went on to evoke the humane philosophy of his mentor and former employer, Dr Mohd Daud Bakar.

“Instead, you have to look at the founders, whether these guys are really thoroughbreds, whether they have the right ethics, whether they are able to cohesively express their idea and convince people and join them either as a co-founder or to fund them.”

“It’s no use putting a lot of money into a company that has a lot of potential but the founder is not right. If that’s the case, that company is already dead.”

(Reporting by Richard Whitehead; Editing by Emmy Abdul Alim


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Richard Whitehead