Mal Raises Record $230 Million Seed Round to Build World's First AI-Native Islamic Digital Bank Targeting 2 Billion Muslims

Mal, an Abu Dhabi-based fintech startup building the world's first AI-native Islamic digital bank, has closed a $230 million seed funding round, marking the largest seed-stage raise in Middle East and Africa history. The round was led by global investment platform BlueFive Capital with participation from strategic investors and family offices, positioning the pre-launch company to address a $7 trillion Islamic finance market with no dominant digital player.

Founded by serial entrepreneur Abdallah Abu-Sheikh, Mal aims to serve the world's 2 billion Muslims and underbanked communities through a mobile-first platform combining artificial intelligence infrastructure with Shariah-compliant financial principles. The company plans to launch in the first quarter of 2026, beginning in the United Arab Emirates before expanding across the Middle East and Asia.

The Islamic finance sector represents approximately $7 trillion globally with projections reaching $7.5 trillion by 2028 according to Standard Chartered forecasts, yet remains dominated by traditional banks and fragmented digital offerings. No single global banking leader serves this market comprehensively, creating opportunity for a first-mover advantage in AI-powered Islamic banking.

Abu-Sheikh told CNBC the funding size reflects the opportunity scale, emphasizing that Mal isn't merely a business venture but addresses challenges communities have experienced for years. "We're building Mal to bridge the gap between ethical finance and modern financial tools, and to serve more than 2 billion people," Abu-Sheikh stated. "This raise is a vote of confidence in our mission to deliver a next-generation digital experience that puts intelligence, values, and accessibility at its core."

The company targets expansion into Indonesia, Pakistan, and Bangladesh alongside Middle Eastern markets, all regions with substantial Muslim populations and significant underbanked segments. Mal is currently pursuing regulatory approvals across multiple jurisdictions while advancing product development, though it does not yet hold banking or financial services licenses and is not conducting regulated financial activities.

Mal's leadership includes former executives from Revolut and Nubank, two of the world's most successful digital banking disruptors. This pedigree signals the company's intention to bring proven digital banking playbooks to Islamic finance, adapting successful growth strategies while maintaining Shariah compliance and ethical financial principles.

Abu-Sheikh brings credibility through previous successful exits. He founded Astra Tech in March 2022, which raised $500 million led by G42 in December that year before acquiring communications platform Botim. In November 2024, Abu-Sheikh sold his majority stake in Astra Tech to G42 for an undisclosed amount, demonstrating his ability to build and scale technology companies in the region.

Mal positions its AI-native infrastructure as core differentiation, not merely a feature layered onto traditional banking systems. The platform is being built from the ground up with artificial intelligence embedded in architecture, product design, and operational processes, enabling personalized experiences, automated compliance verification, and intelligent financial guidance aligned with Islamic principles.

The company emphasizes delivering localized offerings tailored to each region's socioeconomic and financial landscape rather than a one-size-fits-all approach. This localization strategy addresses the reality that Islamic finance principles are interpreted and applied differently across regions, requiring nuanced understanding of local religious scholarship, regulatory frameworks, and customer expectations.

BlueFive Capital's leadership of the round provides significant institutional validation. The Abu Dhabi-based asset manager oversees more than $4 billion in assets under management and brings regional expertise alongside global investment networks. The participation of strategic investors and family offices suggests confidence that specialized digital banking models aligned with Islamic finance could capture substantial market share in the next phase of fintech growth.

The funding reflects broader shifts in regional fintech investment, with capital increasingly flowing toward digital banks and financial infrastructure platforms rather than standalone consumer applications. Investors are prioritizing startups capable of operating across borders while aligning with local regulatory and cultural frameworks, including Shariah governance.

Lucy Chow, limited partner at London-based Pact VC, noted that Mal aims to be the first mover in AI-driven Islamic banking with no comparable competitor currently operating. "There is huge growth potential if Mal can fast-track regulatory approval and scale quickly," Chow stated, acknowledging that execution will determine whether the ambitious vision translates to market leadership.