Qardus is an ethical & Sharia-compliant financing platform for social impact SMEs and investors.
- Over £2.3 million in SME financing.*
- Growing list of investors with £8.2k avg. investment balance.
- 3x increase in avg. revenue per deal (ARPD) over last year.
- Track record with over £600k in repayments to date.
In the UK, the 4 million strong British Muslim community contributes over £31 billion to the UK economy (2012 stats). However this highly entrepreneurial community is massively underserved due to the lack of financial services that align with their ethics and values. This is primarily due to prohibitions on the payment and receiving of interest in Islam.
There is a gap in the market in particular when it comes to Sharia-compliant (i.e. Islamic) business financing options for SMEs and fixed income products for investors.
Globally, even though the Islam finance market is expected to reach £3.69 trillion by 2024, 35% of SMEs in Islamic (OIC) countries are deterred from obtaining financing due to a lack of Islamic financing options (IFC).
At Qardus we aim to solve this problem by leveling the playing field so all SMEs can grow and continue to play a vital role in the economy.Qardus is the UK's first ethical & Sharia-compliant financing marketplace for social impact SMEs and investors.
*(YTD May 2022 to May 2023).
Substantial accomplishments to date
• FCA approved (FRN 921442) as an Appointed Representative, VC backed and launched the platform during the pandemic.
• Total SME financing on platform to date £2.3 million with a strong pipeline of deals (2.7x YoY growth - YTD May 2022 to May 2023).
• Solid repeat client rates with over 40% of our early clients obtaining top-up financing to further grow their businesses.
• According to our calculations, SMEs we have funded were able to grow by 51% since they received funding on our platform. This demonstrates how our financing facilities and ultimately our investors were able to help these SMEs grow and ultimately contribute to the growth of the UK economy.
• Over 2.4k registered investors with £8.2k average investment balance on platform.
• An average ROI for investors of 10.44% per year (Average IRR of 22.8%) to date.
• Track record with over £600k in repayments to date.
• 3x increase in average revenue per deal (ARPD) over the last year alone. LTV/CAC ratio currently at over 5x.
• We won a financial inclusion award at the Peer2Peer Finance Awards 2022.
• Featured in the press including in Sifted, Islamic Finance News, Peer-to-Peer Finance News, Fintech Futures amongst others.
Current Revenue Stream
• We charge SMEs an arrangement fee of 5% of funds raised on our platform. These are deducted from the proceeds before drawdown by the business. On our last couple of deals we started charging 6%.
• We charge investors an ongoing annual servicing fee of 3% of the funds invested. On our last deal we started charging 3.5%.
• This means our total fees currently amount to 14% of the deal value over the 36 months tenor of a facility.
Future Revenue Stream
In addition to the fees highlighted, going forwards we plan to charge:
• In addition to the fees highlighted, going forwards we expect to charge: Financing as a Service (FaaS) fees for use of our proprietary technology by Islamic financial institutions across the globe.
• In addition to the fees highlighted, going forwards we plan to charge banking fees, as we aim to become an Islamic SME challenger bank. We note that this will require us seeking additional regulatory permissions.
Use of proceeds
The breakdown of how the funds will be spent is as follows:
• 39% of the funds will be spent on growing our team, with the aim to grow the business and to achieve the £13 million target in SME financing within year 1 of the raise.
• 28% of the funds will be spent on product development as we continue building a credit engine that will power our growth and our FaaS solution for Islamic banks.
• 17% of the funds will be spent on marketing costs for acquiring SMEs & investors on the platform.
• 10% of the funds will be spent on costs associated with obtaining additional licenses, developing new products and tax efficient vehicles for investors.
• The remainder of the funds will be used for other costs.
The company currently has two classes of shares, A Ordinary and Ordinary. All investors in this round, including Seedrs investors, will be receiving A Ordinary shares.
On a return of capital as a result of winding up of the Company, proceeds will be distributed to all shareholders pro rata as if all shares were one class.
In the event of an exit, the proceeds will be paid in the following order:
1) Ordinary A shareholders will receive 99.999% of the issue price paid per Ordinary A shares and Ordinary shareholders will receive 0.001% of the issue price paid per ordinary share.
2) Ordinary shareholders will then receive a catch up amount per Ordinary share equal to the highest amount paid up on each Ordinary A share
3) The balance will then be distributed to all shareholders pro rata as if all shares were of one class.
The company has a bounce back loan from Lloyds Bank with £38,888 outstanding at an interest rate of 2.5% per annum. The loan is repaid in monthly instalments of €567.13 with the final amount due 15 June 2031.
The funds raised from this investment round will not be used to repay these loans. Qardus is committed to repaying this loan in full in the next 12 months.
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