RIYADH: With the rise of entrepreneurs in the Middle East and North Africa region, venture funding has been critical for small businesses and startups to thrive in an emerging market.
In an exclusive interview with Arab News during the Top CEO event in Dubai, Khalid Abdulla Janahi, chairman at Vision 3, said that Islamic finance and ethical finance complement one another in an entrepreneurial ecosystem.
“Venture capital is the same thing as its Shariah-compliant, and it’s ethical. Because you’re taking risks, the rewards could be very high, but you could lose them too. So, I think that aspect is what’s happening today,” Janahi explained.
He added that countries with mature entrepreneurial ecosystems like the US have no Shariah compliance but invest money in entrepreneurs and sometimes celebrate failure before success, indicating that venture capitals share the risk with the entrepreneur.
Janahi stressed on the double-digit unemployment rate under 30 in Saudi Arabia, saying that for the Kingdom's ecosystem to flourish the unemployment rate must be a one-digit number which could be accomplished with a robust entrepreneurial ecosystem.
“I see international venture capitals investing in startups in Saudi Arabia, be it Sequoia or Tiger Global. They’re coming in. So interestingly, they are doing the Musharaka side by putting money into the country,” he explained.
Janahi added that most people are going to venture capitals, and as long as investments are going into Halal businesses, it is Shariah-compliant.