Rankings of future Islamic VC hubs

Vladimir Malenko
3 min readJul 20


Dubai. Photo by Ahmed Aldaie

This article was first published in IFN Volume 20 Issue 28 dated the 12th July 2023.

In April 2023 we at FairFin initiated a study to determine what it takes to create an Islamic venture capital hub. We asked 42 Islamic finance professionals to rank 10 centers of Shariah finance according to 10 different criteria (the cities were rated from 1 to 10). In this article I would like to present our ranking methodology and the resulting table.

The ranked cities were — Kuala Lumpur, Jakarta, Bandar Seri Begawan, London, New York, Dubai, Abu Dhabi, Riyadh, Manama and Doha. So, I am proud to present the “Islamic VC Development Matrix 10X10” (each factor lists top 3 contenders):

I. The status of the local economy and financial literacy. In countries with large Muslim population the economy must generate sufficient demand for startups’ Shariah compliant services. Dubai — 9.3, Riyadh — 9.0, Kuala Lumpur — 8.5.

II. The presence of an ambitious and visionary development programs. Among the most popular examples are Saudi Vision 2030, Abu Dhabi Economic Vision 2030 and Malaysia’s 12th 5-year Economic Plan. Riyadh — 9.1, Abu Dhabi — 7.8, Dubai — 7.8.

Riyadh, Saudi Arabia

III. The regulation. Islamic finance regulation varies dramatically from country to country, and so far, many attempts for unifications have not been very effective. Dubai — 6.6, Kuala Lumpur — 5.4, Manama — 5.3.

IV. Focus on specific industries. Islamic tech is broadly based on fintech. So, the areas of concentration are mainly limited to payment solutions, crowdfunding, investment advisory, takafultech and cryptos. Kuala Lumpur — 8.0, Dubai — 7.9, London — 7.8.

Kuala Lumpur. Photo by Izuddin Helmi Adnan

V. Access to talent. Many Islamic VC centers, except for London and Kuala Lumpur do not have world-class universities and research centers. But abundant wealth may place them on the recipient end of “brain-drains”. Dubai — 9.3, Manama — 8.8, Kuala Lumpur — 8.7.

VI. Availability of high-tech fetwas. The pool of religious scholars who are “tech-savvy” and can render an opinion on blockchain, cryptocurrency and digital application is rather small. Kuala Lumpur — 8.4, Jakarta — 8.1, London — 8.1.

VII. Sources of funding. They usually include venture capital funds, angel investors and government sponsorship. This is one of the most important factors that is still dominated by government assistance. Riyadh — 9.1, Dubai — 8.6, Kuala Lumpur — 7.8.

VIII. Government support. Malaysia Digital Economy Corporation (MDEC) or Abu Dhabi Growth Fund (ADG) are the primes examples. Riyadh — 8.9, Kuala Lumpur — 8.2, Abu Dhabi — 8.0.

IX. Average firm size. There is a very slow pace of adopting Islamic fintech by established banks and financing companies. So, the economies built on medium sized enterprises with massive competition are more conducive to the development of Islamic tech companies. Jakarta — 8.3, Kuala Lumpur — 8.0, London — 7.8.

X. Livability and infrastructure. Given that a large segment of Islamic entrepreneurs is comprised of expatriates, this factor may become the key one. Dubai — 8.9, London — 8.8, Kuala Lumpur — 8.6.

Jakarta. Photo by Sulthan Auliya

The resulting table contains average scores that may predict which cities are better positioned to become Islamic VC hubs (Riyadh is ranked surprisingly high):