Mal raises $230m to build AI-native Islamic digital bank

By Vriti Gothi

Abu Dhabi-based FinTech startup Mal has secured $230 million in what it says is the largest seed funding round ever raised in the Middle East and Africa, signalling continued investor appetite for digital banking platforms focused on Islamic finance and financial inclusion.

The funding round was led by global investment firm BlueFive Capital, with participation from a group of strategic investors and family offices. Mal was founded by Middle East entrepreneur Abdallah Abu-Sheikh and is currently developing a mobile-first digital bank that is expected to launch later this year, subject to regulatory approvals.

Mal is positioning itself to serve the estimated $7 trillion global Islamic finance market, a sector that has expanded steadily over the past decade but remains dominated by traditional banks and fragmented digital offerings. By building a fully digital, Shariah-compliant platform from the ground up, the company aims to address gaps in access, cost efficiency and product personalisation, particularly for younger and digitally native users.

The startup said its banking infrastructure will be AI-native, enabling automated compliance processes, personalised financial products and scalable cross-border operations. In addition to targeting the global Muslim population, Mal plans to focus on underbanked communities in emerging markets, where access to formal financial services remains limited despite high mobile penetration.

The newly raised capital will be used primarily for product development and to obtain the necessary banking and financial services licences across multiple jurisdictions. Mal plans to roll out its services in phases, starting with select markets in the Middle East before expanding into key Asian markets where demand for Islamic financial products is growing.

The scale of the seed round reflects a broader shift in regional FinTech investment, with capital increasingly flowing into digital banks and financial infrastructure platforms rather than standalone consumer applications. Investors are also showing heightened interest in startups that can operate across borders while aligning with local regulatory and cultural frameworks, including Shariah governance.

As competition intensifies among digital banks in the Gulf and Asia, Mal’s challenge will be execution, including navigating complex regulatory environments and differentiating its offering in a crowded FinTech landscape. However, its ability to secure substantial early-stage funding suggests confidence among investors that specialised digital banking models aligned with Islamic finance could play a larger role in the next phase of FinTech growth in the region.