Venture Capital

Only disruptors need apply

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.

innovation 4 impactThe 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 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 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 enterThe deadline is August 10, 2015!

Development of Islamic venture capital: Key considerations for investors

The need for growth–oriented entrepreneurial ventures in every society is a must, and it is especially needed in the Muslim world. Venture capital forms a great influence in any economy because it creates innovations, new jobs, income and wealth.

Venture capital is not a new phenomenon; examples of entrepreneurs raising capital from private investors were found in the Babylonian era, in the early age of Islam and early medieval Europe. These and contemporary examples show that venture capital is not unique to the United States, where it thrives today.

The idea of venture capital originated from muḍārabah contract and made its way to Europe with the spread of Islam (Cizacka, 1996: 10). Nevertheless, venture capital and private equity industry was, in its initial decades, a predominantly American phenomenon. The phenomenon has been pivotal in transforming innovative ideas from universities and research and development laboratories in the US into high growth companies such as the Intel Corporation, Cisco System, Microsoft, Oracle,, Yahoo! and others. (more…)

Learning more about Angel Investing

Buddy Bounce

By Natasha Crank, Thomson Reuters

Back in October, I was lucky enough to attend a very inspiring event hosted by Angel Academe. Thomson Reuters supplied the use of our London Mark Square location for the event, so it couldn’t have been easier to attend if you’re based in this office. It was great to see such a high number of external guests in attendance.

Angel Academe is a community of professional women with extensive business experience who want to support tech entrepreneurs – as mentors, non-execs and angel investors.  I didn’t quite know what to expect from the evening, but I came away with a much better understanding of what is meant by angel investing, and a curiosity to learn more about tech start ups. The event was opened by Jeanine Long Head of MIS Operations – Corporate Systems, who provided an overview of Thomson Reuters, and welcomed Angel Academe. Sarah Turner, founder of Angel Academe then discussed the importance of Tech London Advocates as a voice for the community and how & why we need to bring more women into London’s tech ecosystem, particularly as angel investors. (more…)

Hot coffee chains lure cool investors

Small chains such as Stumptown Coffee Roasters and Blue Bottle Coffee are pulling in more than customers searching for high-end beans. They’re also drawing in investors such as Jack Dorsey and Tony Hawk. Reuters correspondent Lisa Baertlein explains why.

A startup ditches Silicon Valley for Detroit

Two Harvard-educated venture capitalists abandon Silicon Valley and head home to downtrodden Detroit, finding opportunity and money to grow a business in a city that many left for dead.

Watch more Tech Tonic episodes.

The problem with VC

Richard Beales and Breakingviews columnists discuss new data showing weak U.S. venture capital performance and why only a few funds do very well.

Watch more Breakingviews episodes.

Is Marc Andreessen’s Success Overblown?

As co-founder of Netscape, Marc Andreessen to many is a symbol of Silicon Valley success. But Reuters’ Felix Salmon says Andreessen’s projects and investments don’t always work. Salmon and Reuters West Coast Bureau Chief Jonathan Weber discuss the tech figure’s legacy.

Follow the conversation on Twitter at #AspenIdeas.

Startups Still Want To Be Facebook

The days of landing financing for a startup after drawing up a business plan on a napkin are done thanks to Facebook’s IPO debacle. But entrepreneurs and venture capitalists say a carefully crafted proposal will still reel in money and the goal remains an IPO. Just don’t expect a fat valuation.

Watch more episodes of Tech Tonic.

Is The Venture Capital Model Broken?

Investors in venture capital fair poorly while the firms make out like bandits, according to a major study by the Kauffman Foundation. Felix Salmon has a frank conversation with Diane Mulcahy, Director of Private Equity for the Kauffman Foundation.

Watch more episodes of Felix TV.

Venture-Backed IPOs Have Strongest Opening Quarter In Five Years

A venture-backed IPO is when shares in a company that has previously been funded by private investors are sold to the public. In recent years, the market has been slow; but an Exit Poll report by Thomson Reuters and the National Venture Capital Association (NVCA) shows that the first quarter of 2012 marked the strongest opening quarter for venture-backed IPOs since 2007.

“As we close the first quarter of 2012, venture-backed companies are extremely well positioned to consider an initial public offering on a U.S. exchange,” said Mark Heesen, president of the NVCA. “The recently passed JOBS Act will grant emerging growth companies temporary but significant regulatory relief during the IPO process, allowing them to focus on accessing capital to grow their businesses.”

If you want to learn more and see the numbers, please read the full press release. Or check out this story on which provides additional analysis.