Takadao, headquartered in Saudi Arabia, is making waves in the world of Shariah-compliant blockchain-based insurance. The company recently closed a successful pre-seed funding round, raising US$1.6 million, with the backing of Draper Associates, an early-stage venture capital (VC) firm based in the United States. This round also witnessed the participation of two prominent Saudi-based entities, BIM Ventures, a venture builder, and Core Vision Ventures, a VC firm, as well as Prince Sultan bin Fahad bin Salman Al Saud.
Established in 2022 by the husband and wife team of Morrad Irsane and Sharene Lee, Takadao's Takaful insurance platform is designed as a decentralized asset organization (DAO) on the blockchain, offering a halal-compliant alternative to traditional insurance. The newly acquired capital will be dedicated exclusively to two flagship products: Takaturn, a community-owned savings and loan program, and Takasure, a forthcoming Takaful insurance DAO fund. Irsane emphasized their commitment, stating, "The new funds will be used to continue developing and launching products for our community, with our flagship product, Takasure, scheduled for a June 2024 release. In the meantime, we've just launched Takaturn 2.0, a savings and loan program based on the chit fund or committee concept, designed to help individuals grow their crypto savings while providing access to interest-free loans."
For a startup that has only been operating for two years and is now venturing into the global market, gaining the support of Tim Draper, founder of Draper Associates and a renowned venture capitalist, is a significant milestone for Takadao. Sharene Lee expressed her excitement, stating, "Every investor who joins us boosts our morale because it signifies belief in our mission and a desire to support us. Tim not only brings this morale boost but also adds value with his extensive network and valuable advice. His experience investing in numerous startups over the years and his expertise in business development make his involvement invaluable, especially as we anticipate a challenging journey and the need for mentors to help us achieve our goals."
While it's evident that Takadao primarily caters to the Muslim community, Irsane emphasizes that their use of blockchain technology and Web3 can address the issue of limited accessibility in the broader Islamic Finance sector. He explains, "Islamic finance based on existing banking infrastructure has always been a compromise. Traditional Islamic finance suffers from inefficiency and a lack of confidence due to the need for workarounds to accommodate Islamic principles. The blockchain and cryptocurrencies offer a new, inherently non-interest-based infrastructure for building Islamic finance, making it more transparent, fair, and accessible."
Takadao's vision extends beyond serving the Muslim population. The startup is actively addressing the needs of the underinsured worldwide. Lee highlights the issue, stating, "Billions of people remain uninsured because insurance has evolved into a profit-driven industry closely tied to traditional banking. The blockchain and cryptocurrencies provided by Takadao offer access to the unbanked and uninsured globally, requiring only an internet connection and a device."
It was this inclusive approach that impressed lead investor Tim Draper. He remarked, "Takadao is one of those companies that has the potential to make a significant impact and positive change in the world. The blockchain, Bitcoin, and decentralization are pure, and Takadao is taking on the insurance industry with something equally pure."
Despite its focus on the intersection of the underinsured and Muslim populations, Irsane clarifies that Takadao welcomes all users who have embraced crypto adoption, particularly in regions with high inflation in local currencies. "Our services are for everyone, irrespective of religion. Takadao offers financial products that are community-owned, benefiting the participants themselves rather than external profit-seeking shareholders."
With Takadao now contributing to the growing Islamic Finance industry, the co-founders hope that their historic funding round can set a precedent for other startups in this space. Lee expressed optimism, saying, "Muslims represent 24% of the global population and are the youngest and fastest-growing demographic. Islamic finance and the Islamic economy are becoming increasingly attractive for investment. The best investors not only predict the future but also actively shape it by investing in it. Takadao is not the first Islamic fintech and won't be the last, but we hope to demonstrate that Islamic finance is a paradigm shift benefiting humanity as a whole. Investing in it will help create a better world."