The world's first Islamic crowd funding real estate startup EthisCrowd has raised US$362,000 seed funding to support its affordable housing projects.
The round was led by Azmi Global, a subsidiary of leading Malaysian law firm Azmi & Associates and Singapore-based VC firm Quest Ventures, along with several undisclosed angel investors from Singapore and the Middle East.
Ethis Crowd says it plans to use the funds to support expansion in the Asia Pacific, corporate governance and project selection improvement, as well as technology enhancement.
“Our expansion strategy is to set up in regions where there’s strong growth and interest from our crowd,” says Ethis Crowd founder Umar Munshi.
Launched in 2014 by Munshi and Erly Witoyo, the Singapore-based startup claims to have an international community of 5,000 private investors in entrepreneurial, business, trade and real estate activities in emerging Asia.
The company claims it has already processed SGD$3.6 million into projects to build 5,000 affordable homes with returns averaging 10 to 16 per cent. And there is another 3,000+ families on the waiting list.
With a focus in Indonesia, Ethis Crowd develops affordable housing for the needy, as well undertaking Wakaf Development*.
"Together, we form a vibrant and cohesive unit geared to positively disrupt the status quo" Munshi says.
"We strive to progress with speed and uplift our community along with us. We aim to develop a more ethical and equitable real estate investment landscape powered by our crowd funding members," Munshi says.
"We are not property tycoons – we empower, enable and mobilise our community to earn just as the wealthy do," he says.
Munshi says crowd funding allows the community to enter and profit from the capital-intensive real estate industry previously monopolized by the wealthy.
"Indonesia is the top market for projects, he says, because "it is experiencing a real estate boom due to its stable and fast-growing domestic-driven economy and huge emerging middle-class.
"This has created an acute shortage of 18 million homes," he says.
Being a Singapore-owned licensed real estate developer, Ethis Crowd is able to have direct ownership of land and assets, engage in construction works, property trading and investment.
According to e27.co Ethis Crowd has also secured 10,000 members with the majority of investments (60 per cent) coming from Singapore as facilitated by Monetary Authority of Singapore (MAS)’s ‘regulatory sandbox’ approach.
It claims to begin seeing growing number of investments coming from the Middle East, the report says
Earlier this year, the startup had invested S$1,000,000 (US$726,000) in subsidising housing development projects in the country.
*Literally Wakaf means to stop, contain or to preserve. In shariah, a Wakaf (plural: awqaf) is a sadaqah jariyyah (recurring / ongoing charity), a voluntary charitable endowment, from ones’ personal belongings or wealth in the form of cash / property for shariah compliant causes.
Its purposes must be:
Once it is dedicated as a Wakaf, the ownership of the asset is transferred to Allah s.w.t allowing a perpetual use for charity.